Consumption spending is $5 million,planned investment spending is $8 million,unplanned investment spending is $2 million,government purchases are $10 million,and net export spending is $2 million.What is GDP?
A)$15 million
B)$23 million
C)$25 million
D)$27 million

Question

Quizplus · Accepted Answer

GDP is calculated as the sum of consumption spending, planned investment spending, government purchases, and net export spending. Unplanned investment spending is not included in this calculation. Therefore, GDP = $5 million (consumption) + $8 million (planned investment) + $10 million (government purchases) + $2 million (net exports) = $25 million. However, the correct calculation should include both planned and unplanned investments, making the total GDP = $5 million + $8 million (planned) + $2 million (unplanned) + $10 million + $2 million = $27 million.

Consumption Spending Is $5 Million,planned Investment Spending Is $8 Million,unplanned