The GDP of the country Econia is $100 billion with the following components: C = $50 billion, I = $15 billion, G = $30, and (X - M) = $5 billion. Which of the following would have the largest immediate impact to increase Econia's GDP?
A) Exports rise by $4 billion.
B) Inventory investment rises by $5 billion due to decreases in sales.
C) The government spends $10 billion more on transfer payments.
D) Consumers spend $8 billion more by reducing their savings by $8 billion.

Question

Quizplus · Accepted Answer

Exports are a component of GDP, so an increase in exports will directly increase GDP.

The GDP of the Country Econia Is $100 Billion with the Following