The country of Freedonia has a GDP of $2,100, consumption of $1,200, and government purchases of $400. This implies that it has
A)domestic investment of $500.
B)domestic investment plus net capital outflow of $500.
C)domestic investment minus net capital outflow of $500.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

GDP is the sum of consumption, investment, government purchases, and net exports. Here, GDP ($2,100) minus consumption ($1,200) and government purchases ($400) leaves $500, which represents domestic investment plus net capital outflow.

The Country of Freedonia Has a GDP of $2,100, Consumption