If nominal GDP in 1998 was $8.7599 trillion; gross private domestic investment spending was $1.5312 trillion; government purchases were $1.5297 trillion; exports were $.9663 trillion; and imports were $1.1159 trillion, the level of consumption expenditures would be
A) $5.8486 trillion.
B) $3.6168 trillion.
C) $5.5494 trillion.
D) $5.6990 trillion.

Question

Quizplus · Accepted Answer

Nominal GDP is calculated as the sum of consumption (C), investment (I), government purchases (G), and net exports (exports minus imports). Using the formula GDP = C + I + G + (Exports - Imports), we can solve for C: $8.7599 trillion = C + $1.5312 trillion + $1.5297 trillion + ($.9663 trillion - $1.1159 trillion). Solving for C gives us $5.8486 trillion.

If Nominal GDP in 1998 Was $8