The following table provides data for an economy in a certain year. $$\begin{array} { l r }
\text { Consumption expenditures } & 1,000 \
\text { Imports } & 600 \
\text { Government purchases of goods and services } & 700 \
\text { Construction of new homes and apartments } & 500 \
\text { Sales of existing homes and apartments } & 600 \
\text { Exports } & 500 \
\text { Government payments to retirees } & 200 \
\text { Household purchases of durable goods } & 300 \
\text { Beginning-of-year inventory } & 500 \
\text { End-of-year inventory } & 600 \
\text { Business fixed investment } & 300
\end{array}$$ Given the data in the table, compute the government purchases component of GDP.

Question

The following table provides data for an economy in a certain year. $$\begin{array} { l r } 
\text { Consumption expenditures } & 1,000 \
\text { Imports } & 600 \
\text { Government purchases of goods and services } & 700 \
\text { Construction of new homes and apartments } & 500 \
\text { Sales of existing homes and apartments } & 600 \
\text { Exports } & 500 \
\text { Government payments to retirees } & 200 \
\text { Household purchases of durable goods } & 300 \
\text { Beginning-of-year inventory } & 500 \
\text { End-of-year inventory } & 600 \
\text { Business fixed investment } & 300
\end{array}$$ Given the data in the table, compute the government purchases component of GDP.

Quizplus · Accepted Answer

The government purchases component of GDP is equal to the total amount spent by the government on goods and services. In this case, that amount is $700 billion, as shown in the table. Therefore, the answer is (C) 700.

The Following Table Provides Data for an Economy in a Certain