In a small economy,gross investment in 2013 is $1,500,consumption spending is $6,000,net investment is $200,government spending is $1,500,exports are $2,000 and imports are $1,000.What is GDP for this economy in 2013?

Question

Quizplus · Accepted Answer

To calculate GDP using the expenditures approach, we add the components of GDP: consumption, gross investment, government spending, and net exports. 
GDP = C + I + G + NX 
where 
C = consumption spending = $6,000 
I = gross investment + net investment = $1,500 + $200 = $1,700 
G = government spending = $1,500 
NX = exports - imports = $2,000 - $1,000 = $1,000

Plugging in the values, we get: 
GDP = $6,000 + $1,700 + $1,500 + $1,000 = $10,200

Therefore, the correct answer is D) $10,000.

In a Small Economy,gross Investment in 2013 Is $1,500,consumption Spending