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Q: Calculate country’s GDP if for the year, Consumer spending is $900 million, Government spending is $250 million, Investment by businesses is $180 million, Exports are $85 million and Imports are $100 million.
  • A. $ 1345 million
  • B. $ 1315 million
  • C. $ 955 million
  • D. $ 815 million
Correct Answer: Option B - GDP (Gross Domestic Product) is the monetary value of all final goods and services produced in a country during a specific period of time. Expenditure Approach -GDP = C + I + G + (X–M) Where, C = Consumption by consumer within country's economy, including durable and non durables goods and services. I = sum of country's investment spent on capital equipment, inventories and housing G = Total government expenditure X = Total export (X-M) = Net Exports M = Total Import = $900 + $180 + $250 + ($85-$100) = $1315 million
B. GDP (Gross Domestic Product) is the monetary value of all final goods and services produced in a country during a specific period of time. Expenditure Approach -GDP = C + I + G + (X–M) Where, C = Consumption by consumer within country's economy, including durable and non durables goods and services. I = sum of country's investment spent on capital equipment, inventories and housing G = Total government expenditure X = Total export (X-M) = Net Exports M = Total Import = $900 + $180 + $250 + ($85-$100) = $1315 million

Explanations:

GDP (Gross Domestic Product) is the monetary value of all final goods and services produced in a country during a specific period of time. Expenditure Approach -GDP = C + I + G + (X–M) Where, C = Consumption by consumer within country's economy, including durable and non durables goods and services. I = sum of country's investment spent on capital equipment, inventories and housing G = Total government expenditure X = Total export (X-M) = Net Exports M = Total Import = $900 + $180 + $250 + ($85-$100) = $1315 million