Question

Look at the following data: durable goods = $200 billion; nondurable goods = $350 billion; services = $600 billion; fixed investment + inventory investment = $200 billion; government purchases = $400 billion; exports = $30 billion; imports = $79 billion. GDP is equal to

Answer 1

Answer:

The answer is $1,701 billion

Explanation:

Gross Domestic Product (GDP) is the cumulative (total) market value of the final outputs (goods and services) produced within an economy(country) during a given period of time usually a year.

GDP = C + I + G + (X - M)

where C - expenditure by households or consumers

I - investments by businesses or firms

G - expenditure from the government

X - exports from the country

M - imports into the country

Total consumers' expenditure is:

durable goods = $200 billion;

nondurable goods = $350 billion; services = $600 billion

Total. $1,150 billion

Total business investment is $200billion

Therefore, GDP is

$1,150 + $200 + $400 + ($30 - $79)

=$1750 - $49

= $1,701 billion