The country of Meritor uses the merit as its currency.Recent national income statistics shows that it has GDP of 700 million merits,no government transfer payments,taxes of 210 million merits,a budget surplus of 60 million merits,and investment of 100 million merits.What is the sum of its consumption and government expenditures?

Question

Quizplus · Accepted Answer

The GDP is the sum of consumption, investment, government expenditures, and net exports. Given that there are no government transfer payments and a budget surplus of 60 million merits, government expenditures are 210 million (taxes) - 60 million (surplus) = 150 million merits. With GDP at 700 million merits and investment at 100 million merits, consumption and government expenditures together must be 700 million - 100 million = 600 million merits.

The Country of Meritor Uses the Merit as Its Currency