Question

Consider an economy where consumption equals $500, investment equals $900, government purchases equal $1000, imports equal $900 and exports equal $100. Calculate its GDP.

Answer 1

The GDP is 3200.

Step-by-step explanation:

The GDP equals: Consumption + Investment + gOvernment purchases + Exports - Imports.

GDP = C + I + O + E - M

`500+900+1000+900-100 = 3200`

Answer 2

C+I+G+(X-M)

500+900+1000+(100-1000)

=1500