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Exploring GDP's Treatment of Import Value Fluctuations
December 3, 2023
How does GDP account for changes in the value of imports?
GDP considers changes in the value of imports as part of the expenditure approach. Import value reductions can positively impact GDP if domestic production substitutes imported goods, boosting output and expenditure domestically. However, heavy reliance on imports without a corresponding increase in domestic production might negatively influence GDP growth.
Tags : GDP , Imports , Trade Balance