Question

If in some country personal consumption expenditures in a specific year are $50 billion, purchases of stocks and bonds are $30 billion, net exports are - $10 billion, government purchases are $20 billion, sales of secondhand items are $8 billion, and gross investment is $25 billion, what is the country’s GDP for the year?

Answer 1

Answer: $85 Billion

Explanation:

Given that,

Personal consumption expenditures in a specific year = $50 billion

Purchases of stocks and bonds = $30 billion

Net exports = (- $10 billion)

Government purchases = $20 billion

Sales of secondhand items = $8 billion

Gross investment = $25 billion

From the above information, expenditure method is more suitable.

GDP = Personal consumption expenditures + Gross investment + Government purchases + Net exports

        = $50 + $25 + $20 - $10

        = $85 Billion