The Textbook Treatment of Net Exports: Will the Uninformed Reader Understand?

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The gross domestic product (GDP) expenditures approach is an effective way to address the components of GDP. However, when it comes to net exports, textbooks often lack detail. Twenty principles-level textbooks were examined for their treatment of net exports within the GDP expenditures approach. Using a scoring rubric, I conclude that only half provide enough detail for an uninformed reader to arrive at a correct understanding of net exports. In this paper, I will correct misconceptions, make three specific recommendations for improving GDP instruction, and provide a short lesson that can be easily implemented in the classroom.

Scott Wolla