$$\begin{array} { | l | c | }
\hline \text { Personal Consumption Expenditures } & \$ 4,500 \
\hline \text { Consumption of Fixed Capital } & 150 \
\hline \text { Gross Private Domestic Investment } & 800 \
\hline \text { Government Purchases } & 950 \
\hline \text { Exports } & 65 \
\hline \text { Imports } & 85 \
\hline
\end{array}$$ Refer to the accompanying data about a hypothetical economy (in billions of dollars). GDP in this economy is
A) $6,080 billion.
B) $6,230 billion.
C) $6,380 billion.
D) $6,400 billion.

Question

$$\begin{array} { | l | c | } 
\hline \text { Personal Consumption Expenditures } & \$ 4,500 \
\hline \text { Consumption of Fixed Capital } & 150 \
\hline \text { Gross Private Domestic Investment } & 800 \
\hline \text { Government Purchases } & 950 \
\hline \text { Exports } & 65 \
\hline \text { Imports } & 85 \
\hline
\end{array}$$ Refer to the accompanying data about a hypothetical economy (in billions of dollars). GDP in this economy is
A) $6,080 billion.
B) $6,230 billion.
C) $6,380 billion.
D) $6,400 billion.

Quizplus · Accepted Answer

GDP is calculated as the sum of Personal Consumption Expenditures, Gross Private Domestic Investment, Government Purchases, and Net Exports (Exports - Imports), without including Consumption of Fixed Capital as it's a non-market transaction. Therefore, GDP = $4,500 (Personal Consumption Expenditures) + $800 (Gross Private Domestic Investment) + $950 (Government Purchases) + ($65 - $85) (Net Exports) = $4,500 + $800 + $950 - $20 = $6,230 billion.

Refer to the Accompanying Data About a Hypothetical Economy (In