Gross domestic product (GDP) equals $5 trillion. If consumption equals $3.5 trillion, investment equals $1 trillion, and government spending equals $1.5 trillion, then:

Question

Quizplus · Accepted Answer

GDP is calculated as the sum of consumption, investment, government spending, and net exports (exports minus imports). Given that GDP = $5 trillion, consumption = $3.5 trillion, investment = $1 trillion, and government spending = $1.5 trillion, the sum of these three components is $6 trillion, which is $1 trillion more than the GDP. This means that imports exceed exports by $1 trillion to balance the equation, making net exports negative.

Gross Domestic Product (GDP) Equals $5 Trillion