Using the table in the link below, what is the  expenditure-based estimate of the economy's GDP?

Expert Answers
pohnpei397 eNotes educator| Certified Educator

Using the expenditure method, we can calculate an economy’s gross domestic product by using the following equation:

GDP = Government spending + Personal Consumption + Investments + Net Exports.

In the table in the link below, government purchases are C$43 billion.  Personal consumption is C$85 billion.  Investment is C$35 billion.  Because we are looking at gross domestic product and not net domestic product, we use the gross investment number and not the net.  Net exports are C$-1 billion.  This is because imports were C$15 billion and exports were C$14 billion.  Net exports are found by subtracting imports from exports.

To estimate GDP, then, we add these.  43 + 35 + 85 is 163.  We then subtract 1 because net exports were negative.  That gives us 162.

Therefore, our estimate for GDP in this economy, using the expenditures approach, is C$162 billion.