Please calculate GDP given the following numbers.Calculating gdp Personal consumption expenditures (c ) 10,417.1 Gross private domestic investment (...
Please calculate GDP given the following numbers.
Personal consumption expenditures (c ) 10,417.1
Gross private domestic investment ( i) 1,818.0
Exports ( x) 2,435.5
Imports ( m) 2,435.5
Net exports of goods and services (nx)
Government consumption expenditures and gross investment ( g) 3,020.2
Gross domestic product
In this question, you are being asked to use the expenditure approach to calculate gross domestic product. The expenditure approach breaks expenditures down into four categories. These are spending by households, businesses, government, and foreigners. However, the expenditure approach must also take into account the fact that some expenditures go to imported goods and some goods made in the US are bought by foreigners.
Keeping all this in mind, the formula for GDP is
GDP = C + I + G + (X - M)
Where C is consumer spending, I is business investment, G is government spending, X is exports and M is imports. Using your numbers, this gives us
GDP = 10,417.1 + 1,818.0 + 3,020.2 + (2,435.5 - 2,435.5)
GDP = 15,255.3
In this scenario, then, GDP is 15,255.3 of whatever units are being used to measure (if this were the GDP of the US, the unit would be thousands of dollars and the GDP would be $15.255 trillion.