Question

Assume a small nation has the following statistics: its consumption expenditure is $15 million, investment is $2 million, government expenditure on goods and services is $1 million, exports of goods and services to foreigners is $1 million, and imports of goods and services from foreigners is $1.5 million. Calculate this nation's GDP

Answer 1

Answer:

GDP= $17,500,000

Explanation:

Giving the following information:

(C) Consumption expenditure is $15 million

(I) Investment is $2 million

(G) Government expenditure on goods and services is $1 million

(X) Exports of goods and services to foreigners is $1 million

(N) Imports of goods and services from foreigners is $1.5 million

To calculate the GDP, we need to use the following formula:

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

GDP= 15 + 2 + 1 + 1 - 1.5

GDP= $17,500,000