Question

In a small, closed economy, national income (GDP) is $750.00 million for the current year. Individuals have spent $300.00 million on the consumption of goods and services. They have paid a total of $250.00 million in taxes, and the government has spent $400.00 millionon goods and services this year. Use this information and the national income identity to answer the questions.How much is spent on investment in this economy?

Answer 1

The amount spent on investment in this economy is $50 million in the current year.

Step-by-step explanation:

This small or enclosed economy can calculate its Gross Domestic Product (GDP) through various approaches. There is the income approach, the expenditures approach, and the output, value-added or production approach. They give the same results. The GDP measures all of an economy's products and services using the above mentioned approaches.