Question

Given the following information about the economy of Pakistan, calculate Pakistan's GDP. Note that the currency of Pakistan is the Rupee. Assume that the values are all current and no conversions need to be made.The government purchases: 2.80 trillions of rupees.
Individuals consume: 10.40 trillions of rupees.
Individuals save: 5.00 trillions of rupees.
Businesses invest: 1.35 trillions of rupees.
Foreigners spend: 0.60 trillions of rupees to purchase Pakistani firms.
Pakistan imports: 2.31 trillions of rupees.
Pakistan exports: 1.29 trillions of rupees.

________ trillions of rupees

Answer 1

Answer:

• Pakistan's GDP = 13.53 trillions of rupees.

Explanation:

GDP is the gross domestic product. It is the value of all the goods and services produced by an economy (a country), in a period, which is normally one year.

The GDP can be calculated with the equation:

GDP = Consumption + Investment + Goverment spending + Net Exports

Where, Net Exports is the value of the exports less the value of the imports.

Thus, the values that you need to sue to calculate the GDP are:

• Consumptiion
• Investment
• Goverment spending
• Exports
• Import

Identify the values that you need to incorporate in your formula. Here is the selection (all the amounts are in trillions of rupees):

• Consumption = individuals consume: 10.40

• Investment = businesses invest = 1.35

• Government spending = goverment purchases = 2.80

• Exports = Pakistan exports = 1.29

• Imports: Pakistan imports: 2.31

Those are all. Other items, i.e. foreigners spend (0.60 trillions of rupees) and individuals save (5.00 trillions of rupees), do not count for the GDP.

Compute (in trillions of rupees):

• GDP = 10.40 + 1.35 + 2.80 + (1.29 - 2.31) = 13.53

Answer: Pakistan's GDP = 13.53 trillions of rupees.