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In a closed economy, which of the following components of GDP is notincluded?

A) net exports
B) investment
C) government spending
D) consumption

1 Answer

1 vote

Final answer:

In a closed economy, 'net exports' is the component of GDP that is not included as it does not engage in international trade.

Step-by-step explanation:

In a closed economy, the component of GDP that is not included is net exports. Gross Domestic Product (GDP) in a closed economy is calculated using three main components: consumption, business investment, and government spending on goods and services. Since a closed economy does not engage in international trade, it does not have exports or imports, making net exports, which are the difference between a country's total exports and total imports, irrelevant to its GDP measurement.

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