Final answer:
If government expenditure and imports both increase by $400 billion, the GDP does not change because the effect of increased imports cancels out the increased government spending. The GDP for Country A, with the given data, can be calculated as $3,030 billion.
"the correct option is approximately option A"
Step-by-step explanation:
When analyzing the impact of changes in government expenditure and imports on GDP, we look at the components of GDP, which are Consumption (C), Investment (I), Government Spending (G), and Net Exports (Exports - Imports). The formula is C + I + G + (X - M). If government expenditure increases by $400 billion, this increase contributes to GDP growth. However, if imports increase by $400 billion as well, this means that more money is flowing out of the country to pay for these imports, which effectively reduces GDP. Since exports have not changed, the effect of increased imports cancels out the impact of increased government spending. Thus, the overall change in GDP would be zero.
This scenario is illustrated by option d) does not change.
To calculate the dollar value of GDP for Country A, we use the provided data: government purchases of $1,000 billion, business investment of $50 billion, consumption spending of $2,000 billion, export sales of $20 billion, and imports of $40 billion. So the calculation becomes: $2,000 + $50 + $1,000 + ($20 - $40) = $3,030 billion. Therefore, Country A's GDP is $3,030 billion.