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The trade deficit reduces our GDP. Explain why.

2007-10-24 14:24:52 · 2 answers · asked by scalizithaproblem 3 in Social Science Economics

2 answers

No, it does not. It increases savings and investments which then were used to increase capital goods and services of domestic consumption in GNP.

2007-10-26 19:35:13 · answer #1 · answered by toodd 4 · 0 0

Directly. GDP measures how much stuff a country makes, (exports - inports) is part of GDP. GDP measures what we produce. What we ship out of the country and people pay for are things we make, what we buy and don't make is money (products) that another country made.

2007-10-24 21:41:53 · answer #2 · answered by lansingstudent09101 6 · 1 0

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