In a given year, an economy has consumption of $4000, investment of $2000, government purchases of $1500, exports of $500, imports of $600, taxes of $1200, transfer payments of $400, and depreciation of $300. What is the GDP?

Question

Quizplus · Accepted Answer

GDP is calculated as the sum of consumption, investment, government purchases, and net exports (exports minus imports). So, GDP = $4000 + $2000 + $1500 + ($500 - $600) = $7400.

In a Given Year, an Economy Has Consumption of $4000