Question 25 (1 point) Gross Domestic Product equals $1.2 trillion. If consumptio

Question

Question 25 (1 point) Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, then:

a)

exports exceed imports by $150 billion.

b)

imports exceed exports by $50 billion.

c)

exports exceed imports by $50 billion.

d)

imports exceed exports by $150 billion.

a)

exports exceed imports by $150 billion.

b)

imports exceed exports by $50 billion.

c)

exports exceed imports by $50 billion.

d)

imports exceed exports by $150 billion.

Explanation / Answer

The required equation is as below:

Gross domestic product = Consumption + Investment + Government spending + Net export

(1.2 × 1,000) = 690 + 200 + 260 + Net export

Net export = 1,200 – 690 – 200 – 260

Net export = 50

Answer: Exports exceed imports by $50 billion. Option “c” is correct.

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