Final answer:
The value of net exports equals the value of exports minus imports (X - M). For Country A, the GDP would be $3,030 billion, calculated by summing the values of exports, government spending, business investment, and consumption spending and subtracting the value of imports.
Step-by-step explanation:
The value of net exports equals the value of the dollar value of exports (X) minus the dollar value of imports (M), which can be summarized as (X - M). If a country's exports exceed its imports, it results in a trade surplus; otherwise, a trade deficit occurs. In the example of Country A, the Gross Domestic Product (GDP) is calculated by adding together consumption spending, government spending, business investment, and net exports (exports minus imports).
To calculate the dollar value of GDP for the presented case of Country A:
- Export sales are $20 billion
- Government purchases are $1,000 billion
- Business investment is $50 billion
- Imports are $40 billion
- Consumption spending is $2,000 billion
The dollar value of GDP would be the sum of exports, government spending, business investment, and consumption spending minus imports: (20 + 1000 + 50 + 2000) billion - 40 billion = $3,030 billion.