Answer to Question #146218 in Macroeconomics for Lutendo Thendo Ravhambelani

Question

Explain the difference between expenditure on gross domestic product (GDP) and gross domestic expenditure (GDE) using the formula.

Answer 1

GDP = C + I + G + (X- M)

GDP = C + I + G + (X- Z)

In GDP exports are added while imports are subtracted whereas in GDE imports are added and exports subtracted.