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23 January, 08:46

If in some country personal consumption expenditures in a specific year are $50 billion, purchases of stocks and bonds are $30 billion, net exports are - $10 billion, government purchases are $20 billion, sales of secondhand items are $8 billion, and gross investment is $25 billion, what is the country's GDP for the year?

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  1. 23 January, 09:16
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    Answer: $85 Billion

    Explanation:

    Given that,

    Personal consumption expenditures in a specific year = $50 billion

    Purchases of stocks and bonds = $30 billion

    Net exports = ( - $10 billion)

    Government purchases = $20 billion

    Sales of secondhand items = $8 billion

    Gross investment = $25 billion

    From the above information, expenditure method is more suitable.

    GDP = Personal consumption expenditures + Gross investment + Government purchases + Net exports

    = $50 + $25 + $20 - $10

    = $85 Billion
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