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24 March, 13:42

The following are national income account data for a hypothetical economy in billions of dollars: gross private domestic investment ($320); imports ($35); exports ($22); personal consumption expenditures ($2,460); and, government purchases ($470). What is GDP in this economy? A) $3,250 billionB) $3,263 billionC) $3,237 billionD) $3,290 billion

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  1. 24 March, 14:52
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    The answer is C) $3,237

    Explanation:

    GDP = private consumption + gross investment + government investment + government spending + (exports - imports).

    GDP C + I + G + (X_M)

    GDP = 2460 + 320 + 470 + (22-35) = 3237
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