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calculate the four components of aggregate expenditure and gdp for the following economy using data from...

calculate the four components of aggregate expenditure and gdp for the following economy using data from the table below
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Answer #1

direct government expenditures so it will be excluded from GDP.

Changes in inventory=( end of year inventory-beginning of year inventory)=125-100=25. changes in inventory will be counted.

Net export=export-import=75-50=25.

gross private domestic investment(GPDI)=residental fixed+non residential fixed+change in inventories. (where residential fix means expenditure on residential structures and equipment that is owned by the landlord. Non-residential fix means an expenditure by firms on capital such as tools, machinery. so GPDI=100+100+25=225

GDP=PCE+GPDI+NX+GOVT

PCE=personal consumption expenditure

GPDI= gross private domestic investment

NX=net export

GOVT=government expenditure

Therefore GDP=600+225+25+200=$1050

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