Question

Macroeconomics calculation

Find government spending with the follow information:
GDP = $123 million 


Consumer spending = $72 million 


Financial investment spending = $12 million 


Investment spending = $25 million 


Net exports = $5 million

So I know the formula is:
C + Ig + G + (X - M) = GDP
I believe im finding G
I think it goes something like this:
72,000,000 + 25,000,000 + G + (5,000,000)

im not sure though and I need some more help with the rest.
I have a few more questions like this so if anyone can help explain this one too me, I can do the rest on my own

Answer 1

So if the equation you showed is a given, then you are on the right track. I'm trying to figure out where financial investment spending is in the equation, though?
I found this: The following equation is used to calculate the GDP: GDP = C + I + G + (X – M) or GDP = private consumption + gross investment + government investment + government spending + (exports – imports). ... It transforms the money-value measure, nominal GDP, into an index for quantity of total output.

72,000,000+12,000,000+25,000,000+ G + 5,000,000 = 123,000,000
It's easier to solve it without the zeros:
G=123 - 72- 12 - 25 - 5
G= 9 or 9,000,000 is government spending

Remember that (X-M) is NET EXPORTS. They will either give you exports and imports so that you have to subtract, or net exports that you can just plug in. Make sense?