Calculate the four components of aggregate expenditure and GDP for the following economy using data from the table below.Instructions: Enter your responses as whole numbers. If you are entering any negative numbers, be sure to include a negative (-) sign in front of those numbers. GDPConsumption expenditures$600Exports$75Government purchases of goods and services$200Construction of new homes and apartments$100Sales of existing homes and apartments$200Imports$100Beginning-of-year inventory stocks$100End-of-year inventory stocks$150Business fixed investment$100Government payments to retirees$100Household purchases of durable goods$150Consumption expenditures: $ Investment expenditures: $ Government Purchases: $ Net Exports: $ GDP: $

GDP = C + I + G + NX where C = Consumption expenditure I = Investment G = Government spending NX = Net exports i.e. Exports - Imports C = Consumption expenditure = $600 (It includes the household purchase of durable goods, so we will not add it separately ) I = Construction of new homes and apartments + Business Fixed investment + (End of year inventory stock - beginning of year inventory stock) = $100 + $100 + ($150 - $100) = $250 (sale of existing home and apartment is not a part of GDP) G = Government purchase of goods and services = $200 ( Government payment to retirees is not a part of GDP) NX = Exports - Imports = $ 75 - $ 100 = (-) $25GDP = C + I + G + NX = $600 + $250 + $200 - $25 = $1025

Answered: Calculate the four components of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Calculate the four components of aggregate expenditure and GDP for the following economy using data from the table below.

Instructions: Enter your responses as whole numbers. If you are entering any negative numbers, be sure to include a negative (-) sign in front of those numbers.

GDP
Consumption expenditures	$600
Exports	$75
Government purchases of goods and services	$200
Construction of new homes and apartments	$100
Sales of existing homes and apartments	$200
Imports	$100
Beginning-of-year inventory stocks	$100
End-of-year inventory stocks	$150
Business fixed investment	$100
Government payments to retirees	$100
Household purchases of durable goods	$150

Consumption expenditures: $

Investment expenditures: $

Government Purchases: $

Net Exports: $

GDP: $

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