Question

Government Purchases $15 Personal Consumption 120 Gross Investment 25 Consumption of Fixed Capital (depreciation) 5 Exports 8 Imports 12 Refer to the accompanying data (all figures in billions of dollars). GDP is Multiple Choice $160. $156. $158. $164.

Answer 1

Answer: $156

Explanation:

The gross domestic product is referred to as the value of the final goods which a particular country produces for that economy.

Based on the information given, the GDP will be calculated as:

GDP = C + I + G + X - M

where C = consumption = $120

I = Investment = $25

G = government purchases = $15

X = exports = $8

M = imports = $12

GDP = C + I + G + X - IM

GDP = $120 + $25 + $15 + $8 - $12

GDP = $156