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Could someone explain to me how to calculate the GDP formula with investment function or calculating...

Could someone explain to me how to calculate the GDP formula with investment function or calculating the investment function in the closed economy formula? (MACROECONOMICS)

This was one of my incorrect answers and for my resit, i want to go over this but I cannot find any related information anywhere.

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Answer #1

In closed economu the formula for calculating GDP is

GDP = C + I + G + NX

this is the formula for calculating gdp in closed economy with investement function.

See in this equation I is represent the investment and investment is funcyion of inyerest rate its look like I(r) like this. When we calculate gdp we include investmen in closed economy. And remember in closed economy investment equal to savings. Or if you want calculate investment from GdP

I = GDP - C - G - NX.

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