If imports are $100 million more than exports, government spending is $500 million, consumer expenditures are $900 million, and investment spending is $500 million, then GDP is

Question

Quizplus · Accepted Answer

GDP is calculated as the sum of consumer expenditures, investment spending, government spending, and net exports (exports minus imports). Here, net exports are negative $100 million (since imports exceed exports by $100 million). Thus, GDP = $900 million (consumer) + $500 million (investment) + $500 million (government) - $100 million (net exports) = $1.8 billion.

If Imports Are $100 Million More Than Exports, Government Spending