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Below is some data for a hypothetical economy: At equilibrium GDP, what is the value of ( X n ) ?

a. -2
b. +2
c. +5
d. -5

User JezC
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1 Answer

4 votes

Final answer:

The value of net exports (Xn) in the hypothetical economy's GDP equation is represented by (X - M) and calculated based on the information given as -$20 billion in billion units, which means the answer is -2.

Step-by-step explanation:

The student is asking about the value of net exports (Xn), which is represented by (X - M) in the equation for Gross Domestic Product (GDP). The formula for GDP is GDP = C + I + G + (X - M), where C is consumption, I is investment, G is government spending, X is exports, and M is imports. In the data provided, the GDP equation is stated as GDP = $2,000 billion + $50 billion + $1,000 billion + (X - M). The question seems to include a typo in which the value of (X - M) is not provided but subsequently states GDP equals to $3,030 billion. By subtracting the other components from the total GDP ($3,030 billion - $2,000 billion - $50 billion - $1,000 billion), we find that (X - M) equals to -$20 billion. Hence, the value of (Xn) is -2 when accounting for billion units.

User Tnknepp
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