Question

3. Calculating GDP from raw economic data

The following table shows data on personal consumption expenditures, gross private domestic investment, exports, imports, and government consumption expenditures and gross investment for the United States in 2010, as published by the Bureau of Economic Analysis. All figures are in billions of dollars.

Fill in the missing cells in the following table to calculate GDP.

Components
Personal Consumption Expenditures (CC)	$10,417.1
Gross Private Domestic Investment (II)	$1,818
Exports (XX)	$1,935.3
Imports (MM)	$2,435.5
Net exports of goods and services (X−MX−M)
Government Consumption Expenditures and Gross Investment (GG)	$3,020.2
Gross domestic product (GDP)

This method of calculating GDP, which involves summing theamount spent on final goods and services   , is called theexpenditure   approach.

Answer 1

Components
Personal Consumption Expenditures (CC)	$10,417.10
Gross Private Domestic Investment (II)	$1,818
Exports (XX)	$1,935.30
Imports (MM)	$2,435.50
Net exports of goods and services (X−MX−M)	-$500.20
Government Consumption Expenditures and Gross Investment (GG)	$3,020.20
Gross domestic product (GDP)	$14,755.10

Working note:

Net export = exports - imports =  1,935.30-2,435.50

Net export = -$500.2

GDP = Personal Consumption Expenditures + Gross Private Domestic Investment + Net exports + Government Consumption Expenditures and Gross Investment

GDP = 10,417.10 + 1,818 - 500.20+ 3,020.20

GDP = $14755.1