$$\begin{array} { c c c c c c }
\begin{array} { c }
\text { RealGDP, } Y \
\text { (trillions of }
\end{array} & \begin{array} { c }
\text { Consumption } \
\text { expenditure, C }
\end{array} & \begin{array} { c }
\text { Government } \
\text { (trillions of } \
\text { (trillions of }
\end{array} & \begin{array} { c }
\text { expenditure, } G \
\text { (trillions of }
\end{array} & \begin{array} { c }
\text { Exports, } X \
\text { (trillions of }
\end{array} & \begin{array} { c }
\text { Imports, } M \
\text { (trillions of }
\end{array} \
2005 \text { dollars) } & 2005 \text { dollars) } & 2005 \text { dollars) } & \text { 2005 dollars) } & \text { 2005 dollars) } & 2005 \text { dollars) } \
\hline 0.00 & 0.00 & 1.50 & 1.25 & 1.00 & 0.00 \
2.00 & 1.75 & 1.50 & 1.25 & 1.00 & 0.50 \
4.00 & 3.50 & 1.50 & 1.25 & 1.00 & 1.00 \
6.00 & 5.25 & 1.50 & 1.25 & 1.00 & 1.50 \
8.00 & 7.00 & 1.50 & 1.25 & 1.00 & 2.00
\end{array}$$
-The above table presents data from the nation of Pacifica.Aggregate planned expenditure equals $7.5 trillion when real GDP equals
A) $4.0 trillion.
B) $6.0 trillion.
C) $7.5 trillion.
D) $8.0 trillion.
E) $8.5 trillion.

Question

$$\begin{array} { c c c c c c } 
\begin{array} { c } 
\text { RealGDP, } Y \
\text { (trillions of }
\end{array} & \begin{array} { c } 
\text { Consumption } \
\text { expenditure, C }
\end{array} & \begin{array} { c } 
\text { Government } \
\text { (trillions of } \
\text { (trillions of }
\end{array} & \begin{array} { c } 
\text { expenditure, } G \
\text { (trillions of }
\end{array} & \begin{array} { c } 
\text { Exports, } X \
\text { (trillions of }
\end{array} & \begin{array} { c } 
\text { Imports, } M \
\text { (trillions of }
\end{array} \
2005 \text { dollars) } & 2005 \text { dollars) } & 2005 \text { dollars) } & \text { 2005 dollars) } & \text { 2005 dollars) } & 2005 \text { dollars) } \
\hline 0.00 & 0.00 & 1.50 & 1.25 & 1.00 & 0.00 \
2.00 & 1.75 & 1.50 & 1.25 & 1.00 & 0.50 \
4.00 & 3.50 & 1.50 & 1.25 & 1.00 & 1.00 \
6.00 & 5.25 & 1.50 & 1.25 & 1.00 & 1.50 \
8.00 & 7.00 & 1.50 & 1.25 & 1.00 & 2.00
\end{array}$$
-The above table presents data from the nation of Pacifica.Aggregate planned expenditure equals $7.5 trillion when real GDP equals
A) $4.0 trillion.
B) $6.0 trillion.
C) $7.5 trillion.
D) $8.0 trillion.
E) $8.5 trillion.

Quizplus · Accepted Answer

Aggregate planned expenditure is the sum of consumption, government spending, exports minus imports, or $C+G+(X-M)$. Looking at the table, we can find the combination of consumption and government spending that adds up to $7.5$ trillion. From the table, we can see that this occurs when $Y$ is $6$ trillion, $C$ is $5.25$ trillion, and $G$ is $1.25$ trillion. We can then use the formula for aggregate planned expenditure to find: 
$$7.5 = 5.25 + 1.25 + (X - M)$$
Solving for $X-M$, we get $X-M = 0$, indicating that at this level of GDP, exports and imports are equal. Therefore, real GDP must be $6$ trillion, so the answer is choice (B).

-The Above Table Presents Data from the Nation of Pacifica