Question

An economy has $10 trillion in consumption, $2.5 trillion in investment, $3 trillion in government purchases, $1 trillion in exports, and $1.5 trillion in imports. What is GDP in this economy? $15 trillion $16.5 trillion $18 trillion $15.5 trillion

Answer 1

$15 trillions

Step-by-step explanation:

The computation of the GDP is shown below:

GDP = Consumption + Investment + Government purchase + Net exports

where,

Consumption = $10 trillions

Investment = $2.5 trillions

Government purchase = $3 trillions

Net exports = Exports - imports

= $1 trillion - $1.5 trillion

= -$0.5 trillion

So, the GDP would be

= $10 trillions + $2.5 trillions + $3 trillions - $0.5 trillions

= $15 trillions

= 13.5 trillions