Quizzol

QUESTION:

4. Measuring GDP

The following table shows data on consumption, investments, exports, imports, and government expenditures for the United States in 2018, as published by the Bureau of Economic Analysis. All figures are in billions of dollars.

Fill in the missing cells in the table to calculate GDP using the expenditure approach.

	Data
	(Billions of dollars)
Consumption (C)	13,948.5
Investment (I)	3,650.1
Exports (X)	2,531.3
Imports (M)	3,156.7
Net Exports of Goods and Services
Government Purchases (G)	3,520.8
Gross Domestic Product (GDP)

ANSWER:

Fill in the missing cells in the table to calculate GDP using the expenditure approach.

	Data
	(Billions of dollars)
Consumption (C)	13,948.5
Investment (I)	3,650.1
Exports (X)	2,531.3
Imports (M)	3,156.7
Net Exports of Goods and Services	-625.4
Government Purchases (G)	3,520.8
Gross Domestic Product (GDP)	20,494.0

Points:

1 / 1

Net exports are equal to exports minus imports:

$Net Exports$	$=$	$Exports - Imports$
	$=$	$$2,531.3 billion - $3,156.7 billion$
	$=$	$−$625.4 billion$

Using the expenditure approach, GDP is equal to the sum of consumption, investment, government purchases, and net exports:

$GDP$	$=$	$C + I + G + (X - M)$
	$=$	$$13,948.5 billion + $3,650.1 billion + $3,520.8 billion + ($2,531.3 billion - $3,156.7 billion)$
	$=$	$$20,494 billion$

Therefore, in 2018, U.S. GDP was approximately $20.5 trillion.

Posted by Cleveland on September 3, 2024