Question

7. Measuring GDP The following table shows data on personal consumption expenditures, gross private domestic investment, exports, imports, and government purchases of goods and services for the United States in 2009, as published by the Bureau of Economic Analysis. All figures are in billions of dollars. Fill in the missing cells in the table to calculate GDP by adding together the final demands of consumers, business firms, the government, and foreigners-a method of calculating GDP known as the expenditure approach. Data (Billions of dollars) 9,845.9 1,549.3 2,967.2 Personal Consumption Expenditures (C) Gross Private Domestic Investment (I) Government Purchases of Goods and Services (G) Exports (X) Imports (IM) Net Exports of Goods and Services Gross Domestic Product (GDP) 1,587.4 1,976.2

Answer 1

Net Exports of goods and services = Exports - Imports = 1976.2 - 1587.4 = -388.8

Gross Domestic Product = Consumption (C) + Investment (I) + Government Expenditure (G) + Exports (X) - Imports (IM)

GDP = 9845.9 + 1549.3 + 2967.2 + 1587.4 - 1976.2 = 13973.6