If consumption was 70 percent of GDP and both investment and government expenditure were 18 percent each, then we see that
A) GDP can be over 100 percent because it is "gross" rather than "net."
B) the error is due to rounding.
C) exports must be less than imports.
D) exports must be more than imports.
E) we must subtract depreciation from investment so that the components of GDP do not exceed 100 percent.

Question

Quizplus · Accepted Answer

The sum of consumption, investment, and government expenditure is 106 percent of GDP, indicating a trade deficit where imports exceed exports to balance the GDP equation.

If Consumption Was 70 Percent of GDP and Both Investment