The country of Sylvania has a GDP of $4000,investment of $1500,government purchases of $400,and net capital outflow of negative $300.What is consumption?
A) $700
B) $800
C) $2400
D) $2700

Question

Quizplus · Accepted Answer

Using the equation Y = C + I + G + NX, where Y is GDP, C is consumption, I is investment, G is government purchases, and NX is net exports (which is equal to net capital outflow in this case since there are no exports mentioned):
$4000 = C + $1500 + $400 - (-$300)
$4000 = C + $1500 + $400 + $300
Solving for C:
C = $4000 - $1500 - $400 - $300 = $2400. Therefore, the answer is choice C.

The Country of Sylvania Has a GDP of $4000,investment of $1500,government