AP Macroeconomics Question 235: Answer and Explanation
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2. Which of the following is NOT included in GDP?
- A. Federal government purchases of goods and services.
- B. Imports.
- C. State and local government purchases of goods and services.
- D. Exports.
- E. The change in business inventories.
Correct Answer: B
(B) Consider the equation GDP = C + I + G + X. X is exports minus imports. So exports are included in GDP, but imports are subtracted out. G is federal, state, and local government purchases; I is business spending on plant and equipment plus the change in business inventories.