Question

If exports are €0.1 billion more than imports, government expenditures are €0.5 billion, consumer expenditures are...

If exports are €0.1 billion more than imports, government expenditures are €0.5 billion, consumer expenditures are €1 billion, and gross investment spending is €0.5 billion, calculate GDP at market prices (give only a numerical answer up to one decimal

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Answer #1

Answer= 2.1

Reason:

Given is the following data:

Exports - Imports = €0.1 B

Government expenditure = €0.5 B

Consumer expenditure = €1 B

Gross investment spending = €0.5 B

GDP at market prices = ?

The formula for calculating GDP at Market Prices is:

GDP = C + I + G + X - M

where C= Consumption, I = Investment, G= Government Expenditure, and X- M = Exports- Imports

Thus, putting the values in the above formula:

GDP at market prices = €1 B + €0.5 B + €0.5 B + € 0.1 B

= € 2.1 B

Thus, GDP at market prices = 2.1

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