Question

Using the information below, calculate the GDP given the data provided:

Receipts from Factor income from ROW = K50m
Investment = K100m
Depreciation = K30m
Payments of Factor income to the ROW = K150m
Government spending = K200m
Consumption = K250m
A. K470m
B. K480m
C. K500m
D. K520m

Answer 1

To calculate the GDP, use the formula GDP = Consumption + Investment + Government spending + (Exports - Imports). Substituting the given values, the GDP is K470m.

Step-by-step explanation:

To calculate the GDP, we need to use the formula GDP = Consumption + Investment + Government spending + (Exports – Imports). Based on the given information, the values are:

• Consumption = $250m
• Investment = $100m
• Government spending = $200m
• Exports = $50m
• Imports = $150m (Payments of Factor income to the ROW + Depreciation)

Substituting these values into the formula, we get:

GDP = $250m + $100m + $200m + ($50m - $150m) = $470m

Therefore, the correct answer is Option A: K470m.