Question

# Which of the following would result in GDP for an economy equal to \$10 trillion? A....

Which of the following would result in GDP for an economy equal to \$10 trillion?

• A. C = \$6 trillion
I = \$2 trillion
G = \$1.5 trillion
NX = -\$2 trillion
• B. C = \$5 trillion
I = \$5 trillion
G = \$2 trillion
NX = -\$2 trillion
• C. C = \$4 trillion
I = \$3 trillion
G = \$2 trillion
NX = -\$1 trillion
• D. C = \$7 trillion
I = \$2 trillion
G = \$4 trillion
NX = \$3 trillion

GDP is as follows:

Y = Consumption (C) + Investment (I) + Government expenditure (G) + Net Exports (NX)

Putting all the options values:

A]

Given:

C = \$6

I = \$2

G = \$1.5

NX = -\$2

Y = 6 + 2 + 1.5 - 2

Y = \$7.5 trillion

B]

Given:

C = \$5

I = \$5

G = \$2

NX = -\$2

Y = 5 + 5 + 2 - 2

Y = \$10 trillion

C]

Given:

C = \$4

I = \$3

G = \$2

NX = -\$1

Y = 4 + 3 + 2 – 1

Y = \$8 trillion

D]

Given:

C = \$7

I = \$2

G = \$4

NX =\$3

Y = 7 + 2 + 4 + 3

Y = \$16 trillion

Therefore from all the above calculations, Option B] is correct option that gives GDP = \$10 trillion.

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