If consumption is $6 billion, investment is $3 billion, government purchases are $1 billion, and GDP is $12 billion, then net exports must equal:
A) $22 billion.
B) $10 billion.
C) $2 billion.
D) $12 billion.

Question

Quizplus · Accepted Answer

Using the equation Y = C + I + G + NX, we have:
12 billion = 6 billion + 3 billion + 1 billion + NX
Solving for NX, we get:
NX = 2 billion
Therefore, net exports must equal $2 billion.

If Consumption Is $6 Billion, Investment Is $3 Billion, Government