Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
Textbook Question
100%
Book Icon
Chapter 19, Problem 1SCQ

Country A has export sales of $ 2 0 billion, government purchases of $ 1 , 000 billion, business investment is $ 5 0 billion, imports are $ 4 0 billion, and consumption spending is $ 2 , 000 billion. What is the dollar value of GDP?

Expert Solution & Answer
Check Mark
To determine

The Gross Domestic Product (GDP) of country A.

Answer to Problem 1SCQ

GDP= $3030 bn.

Explanation of Solution

Given Information:

Given values in the question are

C= $2,000 bn

I = $50 bn

G= $ 1,000 bn

X= $20 bn

M= $40 bn

Calculation:

So, substituting these values in the equation for GDP, we get,

GDP=$2000+$50+$1,000+($20$40)=$2,000+$50+$1,000$20=$3,030billion

Hence, The Gross Domestic Product (GDP) of country A is $3030 bn.

Economics Concept Introduction

Gross Domestic Product of a country: GDP of a country is the market value of all finished (final) goods and services produced in an economy during a particular year. It represents the economic well-being of a country as it is the aggregate income of that economy.

To define in terms of demand, GDP is the aggregate of all the expenditure by all economic units in an economy, namely, government purchases, private consumption expenditure, investment expenditure, expenditure on net exports(exports-imports), etc. The equation below defines GDP as the aggregate expenditure in the economy:

GDP = C + I + G + (X-M)

Where,

C = Consumption Expenditure

I= Business Investment Expenditure

G = Government Purchases

X = Exports

M= Imports

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Country A has export sales of $20 billion, government purchases of $1,000 billion, business investment is $50 billion, imports are $40 billion, and consumption spending is $2,000 billion. What is the dollar value of GDP?
For the country of Madagascar government spending was $15,000 in 2007. Consumption was $88,000, investment was $10,250, exports were $2500, and imports were $3500. What was GDP equal to?
The GNP of a country is $200 billion, receipts of factor income from the rest of the world are $10 billion, payments of factor income to the rest of the world are $30 billion, and depreciation is $25 billion. What is the GDP and the Net National Product?

Chapter 19 Solutions

Principles of Economics 2e

Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Text book image
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Macroeconomics
Economics
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Text book image
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning