In the identity GDP = C + I + G + X − M, which of the variables on the right-hand side is the most unstable?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Investment expenditure (I)
Of the five variables in GDP = C + I + G + X − M, investment expenditure (I) is the most unstable.
NCERT (2026-27): “2.2.2 Expenditure Method Equation (2.4) expresses GDP according to the expenditure method. It may be noted that out of the five variables on the right hand side, investment expenditure, I, is the most unstable.” |