Question

In 2019: Total expenditure on final goods and services by households (C) in nation X = 500 ₺; of which 100 ₺ is expenditure on final goods and services produced in other countries; Total expenditure on final goods and services by firms (I) in nation X = 800 ₺; of which 300 ₺ is expenditure on final goods and services produced in other countries; Total expenditure on final goods and services by government (G) in nation X = 800 ₺; of which 200 ₺ is expenditure on final goods and services produced in other countries; Total expenditure on final goods and services produced in nation X and purchased by citizens from other countries (X) = 1,000 ₺. Based on the above information, nominal GDP for 2019 is equal to: A) 2,400₺ B) 2,000₺ C) 1,000₺ D) 1,400₺ E) 2,500₺

Answer 1

Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Consumption(C)= 500-100= 400 ₺ (As 100  ₺ was produced in different country, it will be excluded)

Investment (I)= 800-300= 500  ₺ (As 300  ₺ was produced in different country, it will be excluded)

Government Spending (G)= 800-200 =600 ₺ (As 600  ₺ was produced in different country, it will be excluded)

Total expenditure on final goods and services produced in nation X and purchased by citizens from other countries (X) = 1,000 ₺.

Nominal GDP= C+I+G+X= 400+500+600+1000= 2500 ₺