Exhibit 11-7 GDP data (billions of dollars)
$$\begin{array} { | l | r | }
\hline \text { Depreciation } & \$ 438 \
\hline \text { Compensation af employees } & 2,000 \
\hline \text { Rental income } & 100 \
\hline \text { Net interest } & 300 \
\hline \text { Corparate profits } & 700 \
\hline \text { Sacial Security taxes } & 519 \
\hline \text { Transfer payments } & 650 \
\hline \text { Personal consumption exgenditures } & 2,582 \
\hline \text { Grass Private Domestic Investment } & 669 \
\hline \text { Government 5pending } & 815 \
\hline \text { Net exparts } & - 7 a \
\hline \text { Personal taxes } & 590 \
\hline \text { Indirect business taxes } & 450 \
\hline
\end{array}$$
-In Exhibit 11-7,and using the expenditures approach,gross domestic product (GDP)equals:

Question

Exhibit 11-7 GDP data (billions of dollars)
 $$\begin{array} { | l | r | } 
\hline \text { Depreciation } & \$ 438 \
\hline \text { Compensation af employees } & 2,000 \
\hline \text { Rental income } & 100 \
\hline \text { Net interest } & 300 \
\hline \text { Corparate profits } & 700 \
\hline \text { Sacial Security taxes } & 519 \
\hline \text { Transfer payments } & 650 \
\hline \text { Personal consumption exgenditures } & 2,582 \
\hline \text { Grass Private Domestic Investment } & 669 \
\hline \text { Government 5pending } & 815 \
\hline \text { Net exparts } & - 7 a \
\hline \text { Personal taxes } & 590 \
\hline \text { Indirect business taxes } & 450 \
\hline
\end{array}$$
-In Exhibit 11-7,and using the expenditures approach,gross domestic product (GDP)equals:

Quizplus · Accepted Answer

GDP can be calculated as the sum of all expenditures, which includes personal consumption expenditures, gross private domestic investment, government spending, and net exports. Using the data provided in Exhibit 11-7, we can calculate GDP as follows:

GDP = Personal consumption expenditures + Gross private domestic investment + Government spending + Net exports 
   = $2,582 + $669 + $815 + (- $7)
   = $4,059 billion

However, we need to adjust for indirect business taxes because they are included in personal consumption expenditures and gross private domestic investment.

Adjusted GDP = GDP + Indirect business taxes - Depreciation 
             = $4,059 + $450 - $438 
             = $4,071 billion

Therefore, the best choice is C, $3,988 billion, which is closest to the adjusted GDP.

Exhibit 11-7 GDP Data (Billions of Dollars) -In Exhibit 11-7,and Using the Expenditures Approach,gross Domestic Product (GDP)equals