Use the following to answer questions :
Figure: Circular-Flow Model
-(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is GDP in this economy?
A)$100
B)$400
C)$500
D)$600

Question

Use the following to answer questions :
Figure: Circular-Flow Model 
-(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is GDP in this economy?
A)$100 
B)$400 
C)$500 
D)$600

Quizplus · Accepted Answer

GDP in this economy is calculated by adding the total value of all final goods and services produced, which is equal to $500 ($200 consumption spending + $100 investment spending + $100 government spending + $100 net exports). Therefore, the best choice is C.

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