The country of Freedonia has a GDP of $4000,consumption of $1800,and government purchases of $500.Which of the following does this situation imply?
A)Investment is equal to -$1700.
B)Investment plus net capital outflow is equal to $1700.
C)Investment plus net exports is equal to $2200.
D)Saving is equal to -$2200.

Question

Quizplus · Accepted Answer

The GDP equation is GDP = Consumption + Investment + Government Purchases + Net Exports. Here, $4000 = $1800 + Investment + $500 + Net Exports. Solving gives Investment + Net Exports = $1700.

The Country of Freedonia Has a GDP of $4000,consumption of $1800,and