akin to assetson the balance sheet. (b) GDP = C + I + G + X - M%3D (c) Consumption (C) includes Imports (M). Imports are subtracted from GDP to avoidcounting foreign production as domestic production. (d) X - M is called the trade surplus or net exports. (e) G is government spending on services such as police, nurses, soldiers and teachers. Itdoes not include transfer payments such as the pension.
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