The following data are estimates describing Ireland's economy in 2006 and 2007 (in millions of euros, in constant prices): 2006 2007
Consumption 84,000 89,000
Government expenditure 24,000 26,000
Investment 48,000 48,000
Exports 142,000 151,000
Imports 123,000 128,000
Subsidies 1,800 1,900
Taxes 500 500
Which of the following is TRUE regarding Ireland's economy?

Question

Quizplus · Accepted Answer

GDP for 2007 can be calculated using the formula: GDP = Consumption + Government expenditure + Investment + (Exports - Imports) + (Taxes - Subsidies). Plugging in the numbers for 2007 gives: 89,000 + 26,000 + 48,000 + (151,000 - 128,000) + (500 - 1,900) = 184,600 million euros. Consumption in 2007 was 89,000 million euros, which is approximately 48.2% of the GDP (89,000 / 184,600 ≈ 0.482), thus making statement D true.

The Following Data Are Estimates Describing Ireland's Economy in 2006