If consumption = $5,000;investment = $800,government purchases = $700,exports = $30,imports = $60,and transfer payments = $340,then _____.
A)GDP = $7,400
B)GDP = $7,740
C)GDP = $3,140
D)GDP = $6,470
E)GDP = $6,840

Question

Quizplus · Accepted Answer

GDP is calculated as the sum of consumption, investment, government purchases, and net exports (exports minus imports). Thus, GDP = $5,000 + $800 + $700 + ($30 - $60) = $6,470. Transfer payments are not included in GDP calculation.

If Consumption = $5,000;investment = $800,government Purchases = $700,exports =