This:
"Gross expenditures are not the manner by which production is defined."
It certainly is when you are using the Expenditure Equation to define GDP!
G+C+I+(x-m)=Y
This equation says GDP (Y) is the sum of those 4 values. That is a definition, because it tells you what numbers you have to have, in order to calculate the value of your GDP.
G is not net government spending, it is gross spending. It does not consider revenue. (The net number is reflected as the budget deficit or surplus)
C is gross consumption, I is gross private investments.
(x-m) is the only net number, because it's how you have to separate out the domestic component of trade to maintain the D in GDP.
Added together, they are the Gross Domestic Production. (x-m) is a gross number in the eyes of the equation- the total contribution of trade to the GDP.
"a trade deficit indicates the nation imported a greater value of products than it exported."
Yes, that's what it means.
"Consequentially it also indicates the nation's entire net expenditures for producing and consuming products exceeded the values of all of the products the nation produced."
No, it does not mean that. How are you deriving the net expenditure for producing and consuming something? They are not the same thing. The equation assumes all consumption is production.
There is no "net expenditure" for producing something. There is only the cost of producing it. Profit or loss is the net result, and the equation does not care about profit or loss. It only cares how much it sold for.
"That's why imports reduce and exports increase their nation's calculated GDP."
Because imports can't be called domestic production. It's just a math equation. You attribute far more importance to the trade deficit than it deserves. 100% of M is hidden inside C or G or I or X.
G+C+I+(x-m)=Y
Because imports can't be called domestic production. It's just a math equation. You attribute far more importance to the trade deficit than it deserves. 100% of M is hidden inside C or G or I or X.
Exactly!
He's hung up on the math, but still misunderstands it.
That's why he won't answer my beer question in his other thread.
Illogical proponents of pure "free trade".
Illogical proponents of pure "free trade": Annual trade deficits were, and in the future will always continue to be (more than otherwise), always net detrimental to their nation's annual gross domestic products, (ie. GDPs). I'm among the proponents of the proposed unilateral policy of Import...
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He can feel it's a trap, so runs away.