Which of the following can be used to measure the Gross National product in an open economy?
- C+I+G+(X+M)
- C+I+G+X
- C+I+G
-
C+I+G+(X-M)
The correct answer is: D
Explanation
The formula to calculate the components of GNP is Y = C + I + G + X + Z. That stands for
GNP = Consumption + Investment + Government + X (net exports, or imports - exports) - Z (net income earned by domestic residents from overseas investments - net income earned by foreign residents from domestic investments.)