-Using the data in the above table, suppose imports equals $250 billion and investment equals
$1,000 billion. Hence government expenditure equals

Question

Quizplus · Accepted Answer

Government expenditure equals $500 billion because GDP equals consumption plus investment plus government expenditure plus (exports minus imports). In this case, GDP equals $2,000 billion (consumption plus investment), and exports minus imports equals $0 billion (exports of $250 billion minus imports of $250 billion). Therefore, government expenditure must equal $500 billion to make the equation balance.

-Using the Data in the Above Table, Suppose Imports Equals