If in some country personal consumption expenditures in a specific year are $70 billion, purchases of stocks and bonds are $35billion, net exports are -$40 billion, government purchases are $60 billion, sales of second-hand items are $8 billion, and gross investment is $25 billion, what is the country's GDP for the year? What is NDP for year?

Answered: If in some country personal consumption…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

If in some country personal consumption expenditures in a specific year are $70 billion, purchases of stocks and bonds are $35billion, net exports are -$40 billion, government purchases are $60 billion, sales of second-hand items are $8 billion, and gross investment is $25 billion, what is the country's GDP for the year? What is NDP for year?

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Step 1

Introduction

The value of all finished products and services generated in the economy over a specific time period is represented by the gross domestic product. It displays how well the economy is doing. A country is deemed wealthy if it has a high GDP. A country is deemed to have a bad economy if its GDP is low.

In contrast to GDP, NDP also accounts for the declining amount spent on fixed assets (such as computers, buildings, automotive parts, equipment, etc.) employed in the manufacturing phase.