In the economy of Talikastan in 2015,consumption was $800,GDP was $2000,government purchases were $400,and investment was $600.What were Talikastan's net exports in 2015?

Question

Quizplus · Accepted Answer

Net exports = exports - imports
Given information doesn't provide any information about the imports, so we cannot calculate the net exports. However, we can use the equation of expenditure approach to calculate the GDP as:

GDP = C + I + G + NX
Where, C = consumption, I = investment, G = government purchases, NX = net exports

Given,
C = $800
I = $600
G = $400
GDP = $2000

Substituting these values in the equation:

$2000 = $800 + $600 + $400 + NX
NX = $2000 - $800 - $600 - $400
NX = $200

So, exports were greater than imports by $200. But, as the question is asking for net exports, the answer will be negative, i.e., Talikastan had net imports of $200, which means the answer is A) -$200.

In the Economy of Talikastan in 2015,consumption Was $800,GDP Was