Using the following information on a hypothetical economy in equilibrium,calculate total output for 2008.
$\begin{array}{l|r}
\text { Consumption Spending } & \$ 3.5 \text { trillion } \
\hline \text { Net Taxes } & \$ 2.7 \text { trillion } \
\hline \text { Household Saving } & \$ 2.5 \text { trillion } \
\hline \text { Investment Spending } & \$ 2.2 \text { trillion } \
\hline \text { Government Purchases } & \$ 3.0 \text { trillion } \
\hline \text { Net Exports } & -\$ 0.3 \text { trillion }
\end{array}$

If exports are exactly equal to imports,total output for 2008 is
A) $5.2 trillion
B) $5.7 trillion
C) $8.4 trillion
D) $8.7 trillion
E) $13.9 trillion

Question

Using the following information on a hypothetical economy in equilibrium,calculate total output for 2008.
$\begin{array}{l|r}
\text { Consumption Spending } & \$ 3.5 \text { trillion } \
\hline \text { Net Taxes } & \$ 2.7 \text { trillion } \
\hline \text { Household Saving } & \$ 2.5 \text { trillion } \
\hline \text { Investment Spending } & \$ 2.2 \text { trillion } \
\hline \text { Government Purchases } & \$ 3.0 \text { trillion } \
\hline \text { Net Exports } & -\$ 0.3 \text { trillion }
\end{array}$

If exports are exactly equal to imports,total output for 2008 is
A) $5.2 trillion
B) $5.7 trillion
C) $8.4 trillion
D) $8.7 trillion
E) $13.9 trillion

Quizplus · Accepted Answer

Total output (GDP) is calculated as the sum of Consumption Spending, Investment Spending, Government Purchases, and Net Exports. Here, Net Exports are given as -$0.3 trillion, but since exports equal imports, Net Exports should be $0. Therefore, GDP = $3.5 trillion + $2.2 trillion + $3.0 trillion + $0 = $8.7 trillion.

Using the Following Information on a Hypothetical Economy in Equilibrium,calculate