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Question 2 Not yet answered Points out of 1.00 Flag question What is consumption in this economy? In trillions of dollars GDP Government Purchases Transfer Payments Exports Imports Net foreign factor income 5.0 0.2 0.4 0.5 0.4 Select one: a. Not enough information to compute consumption b. 3.6 trillion C. 4.1 trillion d. 3.9 trillion

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Answer #1

Answer : 2) The answer is option c.

GDP = Consumption + Investment + Government purchases + (Exports - Imports)

Putting given values in above formula, we get,

=> 5 = Consumption + 0 + 1 + (0.4 - 0.5)

=> 5 = Consumption + 0.9

=> Consumption = 5 - 0.9

=> Consumption = 4.1

Therefore, consumption is 4.1 trillion. Hence the option c is correct.

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