Question

Country A has export sales of $\backslash (20billion$, government purchases of $\backslash )1,000billion$, business investment is $\backslash (50billion$, imports are $\backslash )40billion$, and consumption spending is $\$2,000billion$. What is the dollar value of GDP?

Short answer

The value of GDP is $3,030 billion

Step-by-step solution

Step 1. Given information

Consumption spending$=\$2000billion$

Business investment$=\$50billion$

Government purchases$=\$1000billion$

Import$=\$40billion$

Export$=\$20billion$

Step 2. Calculation

Calculate the dollar value of GDP

$\begin{array}{rcl}\mathrm{GDP}& =& \mathrm{Private}\mathrm{consumption}+\mathrm{Government}\mathrm{investment}+\mathrm{Government}\mathrm{spending}+(\mathrm{Exports}–\mathrm{Imports})\\ & =& \$2,000\mathrm{billion}+\$50\mathrm{billion}+\$1,000\mathrm{billion}+(\$20\mathrm{billion}-\$40\mathrm{billion})\\ & =& \$3,030\mathrm{billion}\end{array}$