Principles of Macroeconomics / Unit 8 MAC 0714 short lesson, about 20 seconds
Why Imports Are Subtracted
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The idea
Aggregate demand counts spending on output produced here. Imports were already counted inside consumption, investment and government purchases, so subtracting them removes what was produced abroad.
In practice
The minus sign is bookkeeping, not a judgement about trade.
Where people slip
Imports rising does not reduce demand for domestic output. It means some of the spending already counted went abroad and is being taken back out.
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