The following table provides data for an economy in a certain year. $$\begin{array} { l l }
\text { Consumption expenditures } & 50 \
\text { Imports } & 40 \
\text { Government purchases of goods and services } & 20 \
\text { Construction of new homes and apartments } & 30 \
\text { Sales of existing homes and apartments } & 40 \
\text { Exports } & 50 \
\text { Government payments to retirees } & 10 \
\text { Household purchases of durable goods } & 20 \
\text { Beginning-of-year inventory } & 10 \
\text { End-of-year inventory } & 20 \
\text { Business fixed investment } & 30
\end{array}$$
Given the data in the table,compute the value of GDP.

Question

The following table provides data for an economy in a certain year. $$\begin{array} { l l } 
\text { Consumption expenditures } & 50 \
\text { Imports } & 40 \
\text { Government purchases of goods and services } & 20 \
\text { Construction of new homes and apartments } & 30 \
\text { Sales of existing homes and apartments } & 40 \
\text { Exports } & 50 \
\text { Government payments to retirees } & 10 \
\text { Household purchases of durable goods } & 20 \
\text { Beginning-of-year inventory } & 10 \
\text { End-of-year inventory } & 20 \
\text { Business fixed investment } & 30
\end{array}$$
Given the data in the table,compute the value of GDP.

Quizplus · Accepted Answer

GDP can be calculated by summing up all the components of expenditure approach as follows:
GDP = C + I + G + (X - M)
where 
C = Consumption expenditures
I = Business fixed investment + Construction of new homes and apartments + Sales of existing homes and apartments + Household purchases of durable goods + Change in inventory
G = Government purchases of goods and services + Government payments to retirees 
X = Exports
M = Imports

Plugging in the values from the table,
GDP = 50 + (30 + 30 + 40 + 20) + (20 + 10) + (50 - 40)
GDP = 150

Therefore, the best choice is C)150.

The Following Table Provides Data for an Economy in a Certain