Assume net exports are -$220,consumption is $5,000,tax revenues are $1,000,government purchases are $1,500,and 2003 GDP,calculated by the expenditure approach,is $8,000.We can conclude that

Question

Quizplus · Accepted Answer

Using the GDP formula: 
Y=C+I+G+NX 
where Y=GDP,C=Consumption,I=Investment,G=Government spending, and NX=Net exports. 
Given: 
NX=-$220 
C=$5,000 
G=$1,500 
Y=$8,000 
Solve for I: 
$8,000=$5,000+I+$1,500-$220 
$8,000=$7,280+I 
I = $720+ $2,000 government purchases (G) - $1,000 tax revenues, 
which equals: $720 + $2,000 - $1,000 = $1,720 
Therefore, private investment was $1,720, which is option D.

Assume Net Exports Are -$220,consumption Is $5,000,tax Revenues Are $1,000,government