Asked by karleigh rivas on Jun 08, 2024
Verified
The overall effect of accounting for purchases of foreign goods in GDP reduces GDP.
Foreign Goods
Products made in a country other than one's own, often imported for sale or use.
GDP
Gross Domestic Product, a measure of the economic production and growth of a country, calculated as the total value of all goods and services produced over a specific time period.
- Comprehend the elements comprising the Gross Domestic Product (GDP) and the methods of their measurement.
- Comprehend the impact of buying local versus international products on Gross Domestic Product.
Verified Answer
AS
Amrit SandhuJun 12, 2024
Final Answer :
False
Explanation :
Purchases of foreign goods are accounted for as imports in the GDP calculation and are subtracted from the total because GDP measures the value of goods and services produced within a country's borders. However, this does not inherently reduce GDP; it simply ensures that GDP accurately reflects domestic production.
Learning Objectives
- Comprehend the elements comprising the Gross Domestic Product (GDP) and the methods of their measurement.
- Comprehend the impact of buying local versus international products on Gross Domestic Product.