The table below contains data for country A for the year 2010. Refer to Table 23

Question

The table below contains data for country A for the year 2010.

Refer to Table 23-2. What was country A’s GDP in 2010?

$6359

$7136

$7253

$8147

The table below contains data for country A for the year 2010.

Household purchases of durable goods $1293 Household purchases of nondurable goods $1717 Household purchases of services $301 Household purchases of new housing $704 Purchases of capital equipment $310 Inventory changes $374 Purchases of new structures $611 Depreciation $117 Salaries of government workers $1422 Government expenditures on public works $553 Transfer payments $777 Foreign purchases of domestically produced goods $88 Domestic purchases of foreign goods $120

Explanation / Answer

Option C is correct

GDP is the composition of C + I + G + NX. Here, we have C = Household purchases of durable goods + Household purchases of nondurable goods + Household purchases of services + Household purchases of new housing = 4015.

Investment = Purchases of capital equipment + Inventory changes + Purchases of new structures = 1295

Government spending = Salaries of government workers + Government expenditures on public works = 1975

Net exports NX = Foreign purchases of domestically produced goods - Domestic purchases of foreign goods = -32

GDP becomes C + I + G + NX = 4015 + 1295 + 1975 - 32 = 7253

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