In open economies, there is the involvement of the global world aswell. trade occurs between different countries in the form of their inports and exports.
when goods are supplied to another country its called an export and when goods are bought from other countries they arew called imports.
Now when such trading occurs money is spent or earned by the country and the change in GDP would be as follows:
Y= C + I + G + X - M
Y= GDP
C= Comsumer Expenditure
I= Investment
G= Govt. expenditure
X - M= difference between exports and imports
when goods are supplied to another country its called an export and when goods are bought from other countries they arew called imports.
Now when such trading occurs money is spent or earned by the country and the change in GDP would be as follows:
Y= C + I + G + X - M
Y= GDP
C= Comsumer Expenditure
I= Investment
G= Govt. expenditure
X - M= difference between exports and imports
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