If imports are $100 million less than exports, government expenditures are $500 million, consumer expenditures are $1 billion, and gross investment spending is $500 million, then GDP is

Question

Quizplus · Accepted Answer

GDP is calculated as the sum of consumer expenditures, gross investment, government expenditures, and net exports (exports minus imports). Here, consumer expenditures are $1 billion, gross investment is $500 million, government expenditures are $500 million, and net exports are $100 million (since imports are $100 million less than exports, implying exports exceed imports by $100 million). Adding these together gives $1 billion + $500 million + $500 million + $100 million = $2.1 billion.

If Imports Are $100 Million Less Than Exports, Government Expenditures