Suppose the net investment in an economy is $100 billion, depreciation is $200 billion, consumption expenditure is $800 billion, government expenditure is $100 billion, taxes minus transfers are $10 billion and net exports are minus $20 billion. The economy's GDP is:
A) $1170 billion.
B) $1180 billion.
C) $1200 billion.
D) $1220 billion.

Question

Quizplus · Accepted Answer

GDP is calculated as the sum of consumption expenditure, investment (net investment + depreciation), government expenditure, and net exports. Here, it is $800 billion + ($100 billion + $200 billion) + $100 billion - $20 billion = $1180 billion.

Suppose the Net Investment in an Economy Is $100 Billion