Final answer:
Consumption is the largest component of U.S. GDP, making up about two-thirds of it. Business investment is around 15% while government spending is just under 20%. In a practice calculation, if consumption, investment, and government purchases are known along with net exports, they can be summed to determine the GDP value.
Step-by-step explanation:
The largest component of U.S. GDP is consumption. According to the figures from the Bureau of Economic Analysis, consumption accounts for about two-thirds of GDP and has been on a slight upward trend over time. Business investment and government spending contribute smaller portions, with investment averaging around 15% of GDP, and government purchases slightly under 20% of GDP.
The impact of exports and imports is also considered in the GDP, with exports added and imports subtracted from the total demand for goods and services.
Answering a related practice question, if Country A has export sales of $20 billion, government purchases of $1,000 billion, business investment of $50 billion, imports of $40 billion, and consumption spending of $2,000 billion, the dollar value of GDP would be the sum of consumption, investment, government purchases, and net exports (which is exports minus imports).
Calculated it would be $2,000 billion + $50 billion + $1,000 billion + ($20 billion - $40 billion) = $3,030 billion.