Assertion (A): Imports are subtracted in the expenditure method.
Reason (R): Spending by households, firms and the government includes spending on goods made abroad, which is not domestic output.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

C, I and G are measured on all goods bought, including imported ones.
Subtracting M leaves spending on domestic output only; R is the reason.

Concept: Why imports are subtracted
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The rule this testsExpenditure method

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Assertion (A): Imports are subtracted in the expenditure method.Reason (R): Spending by households, firms and the government includes spending on goods made abroad, which is not domestic output.

Explanation

Assertion (A): Imports are subtracted in the expenditure method.
Reason (R): Spending by households, firms and the government includes spending on goods made abroad, which is not domestic output.