Question

Using the following NIPA data, compute GDP. Category Value Personal consumption expenditures $245 billion Wages and salaries $223 billion Imports $18 billion Corporate Profits $42 billion Depreciation $28 billion Gross private domestic investment $86 billion Government purchases $82 billion Exports $9 billion

Answer 1

The dollar value of GDP, calculated using the formula GDP = C + I + G + (X - M) with the provided NIPA data, is $404 billion.

Step-by-step explanation:

To calculate the Gross Domestic Product (GDP) using the provided NIPA data, the formula GDP = C + I + G + (X - M) is applied, where C represents personal consumption expenditures, I represents gross private domestic investment, G stands for government purchases, X is exports, and M is imports.

The given figures are:

Personal consumption expenditures (C) = $245 billion

Gross private domestic investment (I) = $86 billion

Government purchases (G) = $82 billion

Exports (X) = $9 billion

Imports (M) = $18 billion

Plugging these values into the formula gives us:

GDP = $245 billion + $86 billion + $82 billion + ($9 billion - $18 billion)

GDP = $245 billion + $86 billion + $82 billion - $9 billion

GDP = $404 billion

Therefore, the dollar value of GDP using the provided data is $404 billion.

Answer 2

GDP=404 billion

Step-by-step explanation:

The Expenditure Approach is a method of measuring GDP by calculating all spending throughout the economy including consumer consumption, investing, government spending, and net exports. This method calculates what a country produces, assuming that the finished goods and services of a country equals the amount spent in the country for that period.

The formula is:

GDP=C+I+G+/-NX

GDP: Gross Domestic Product

(C) consumer spending – this is the amount that all consumers spend on goods and services for personal use.

(I) investment – this is the amount that businesses or owners spend to invest in new equipment or expansions.

(G) government spending – this includes spending on new infrastructure like bridges and roads.

(NX) net exports – this includes spending on a country’s exports minus its spending on imports.

GDP= 245+86+82+(9-18)

GDP= 404 billion

Notice that we didn't include the Wages, Corporate Profits, Depreciation. The expenditure income approach doesn't include Wages. They are part of the formula to calculate GDP by the Income Approach.