The following table shows data on consumption, Investment, exports, Imports, and

Question

The following table shows data on consumption, Investment, exports, Imports, and government expenditures for the United States in 2003, as published by the Bureau of Economic Analysls. All figures are in billions of dollars. Fill In the missing cells in the table to calculate GDP using the expenditure approach Note: Type in the results without rounding off numbers. Personal consumption expenditures (C) Gross private domestic investment (1) Exports (X) Imports (M) Net exports of goods and services Government consumption expenditures and gross investment (G) Gross domestic product (GDP) $7,703.6 1,664.1 1,040.8 1,540.2 2,092.5

Explanation / Answer

Answer: 1) Net Export of Goods and Services = $ -499.4

   2) Gross Domestic Product= $ 10960.8

Explanation:

The equation for calculating GDP under expenditure method can be expressed as

Y = C + I + G + (X - M)

where, C = Consumption Expenditure   

I = Investment Expenditure   

G = Government Expenditure   

X - M = Export - Import

In our case,

C = $ 7703.6

I = $ 1664.1

G = $ 2902.5

   X = $ 1040.8

   M = $ 1540.2

Net Exports of Goods and Services = X - M

= 1040.8 - 1540.2

= -499.4

Gross Domestic Product = C+I+G+(X-M)

= 7703.6 + 1664.1 + 2092.5 +(-499.4)

   = 10960.8

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