If consumption = $2,000,investment = $600,government purchases = $500,net exports = −$40,transfer payments = $340,then _____.
A)GDP = $2,720
B)GDP = $3,060
C)GDP = $3,140
D)GDP = $3,400
E)GDP = $3,340

Question

Quizplus · Accepted Answer

GDP is calculated as the sum of consumption, investment, government purchases, and net exports. Therefore, GDP = $2,000 + $600 + $500 - $40 = $3,060. Transfer payments are not included in GDP calculation.

If Consumption = $2,000,investment = $600,government Purchases = $500,net Exports