Economics Part A

Calculating GDP for a Country with Imports

In order to facilitate GDP calculations, imports can be considered a loan from a foreign country. The value of the imported goods is the value of the loan. For example, assume that Country C produces 1,000 pairs of shoes each year. The shoe soles are imported from a neighboring country, so the added value of Country C is 1,000 pairs of shoes minus 1,000 pairs of soles. The soles cost $1 each, meaning that Country C owes $1,00

Calculating GDP for a Country with Imports593Calculating GDP for a Country with Imports