Question

Household purchases of durable goods $1293 Household purchases of nondurable goods $1717 Household purchases of services $301 All new residential building $704 Purchases of capital equipment $310 Depreciation $374 Government expenditures on public works $553 Transfer payments $777 Foreign purchases of domestically produced goods $88 Domestic purchases of foreign goods $120 Refer to Table 23-2. What was country A's GDP in 2010? $6359 $7136 $5220 $8147

Answer 1

c. $5,220

GDP = Private Final Household Expenditure + Gross Investment + Governemnt Final Expenditure + Net Exports

1. Private Final Household Expenditure = Household Purchases of Durable Goods + Household Purchases of Non- Durable Goods + Household Purchases of Building

Private Final Household Expenditure = 1,293 + 1,717 + 301

Private Final Household Expenditure = $3,311

2. Gross Investment = All new residential building + Purchases of Capital Equipment + Depreciation

Gross Investment = 704 + 310 + 374

Gross Investment = $1,388

3. Government Final Expenditure = Government Expenditure on public works

Government Final Expenditure = $553 (Transfer payments are bilateral payments which are not included in calculation of GDP)

4. Net Exports = Foreign purchase of domestically produced goods - Domestic Purchase of Foreign Goods

Net Exports = 88 - 120

Net Exports = -$32

GDP = 3,311 + 1,388 + 553 - 32

GDP = $5,220

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