Calculate the four components of expenditure and GDP for the following economy u

Question

Calculate the four components of expenditure and GDP for the following economy using data from the table below Instructions: Enter your response as an integer value GDP nsumption expenditures orts ernment ases s and services onstruction of new homes and apartments Sales of existing homes and apartments Imports Beginning-of-year inventory stocks End-of-year inventory stocks $100 $200 S50 $100 $125 usiness fixed investment ernment payments to retirees ouse urchases of durable Consumption expenditures: S Investment expenditures: $ Government Purchases: S Net Exports GDP: S

Explanation / Answer

These will not be included in calculation of GDP ,sale of existing homes and apartments, Government payment to retiree is also not included in GDP.

Investment expenditure in GDP = Construction of new homes and apartments+ Business fixed investment + Change in inventory

Investment expenditure in GDP (I) = 100+100+(125-100) = 225

Government expenditure(G) = Government purchase on goods and service = 200

Net exports(NX) = Exports - Imports = 75-50= 25

Consumption expenditure (C) = 600

GDP = C+I+G+NX

GDP = 600+225+200+25= 1050

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