Why should imports be excluded from gross domestic product? How is a p

Why should imports be excluded from gross domestic product? How is a purchase of an import recorded in the components of GDP?

What will be an ideal response?

ANSWER

Imports are purchases by domestic buyers of goods and services produced abroad and gross domestic product is a measure of domestic production of goods and services. Any purchase of an import is included as a positive in consumption, and then subtracted out of GDP by recording it also as an import.