Final answer:
Calculating GDP involves adding consumption (C), investment (I), government spending (G), and net exports (exports (X) minus imports (M)). For the example given, the GDP equals $3,030 billion.
Step-by-step explanation:
The equation for calculating Gross Domestic Product (GDP) is represented as GDP = C + I + G + (X - M), where each component is defined as follows:
- C stands for Consumption
- I stands for Investment
- G stands for Government spending
- X stands for Exports
- M stands for Imports
According to the question, the calculation would be:
GDP = $2,000 billion + $50 billion + $1,000 billion + ($20 billion - $40 billion) = $3,030 billion
In essence, the Gross Domestic Product is the sum of all goods and services produced within a country's borders in a specific time period, reflecting the total economic output.