Use the table to answer the question.
Consumption $2,000
Investment $1,000
Government Spending $1,000
Imports $500
Exports $600
The market value for each type of expenditure is given for a hypothetical country in the table above. Calculate the gross domestic product of this country.
a
$3,900
b
$4,100
c
$5,100
d
$4,000
The gross domestic product (GDP) is calculated by adding all the types of expenditure: GDP = consumption + investment + government spending + exports - imports. Plugging in the given values, we get:
GDP = $2,000 + $1,000 + $1,000 + $600 - $500
GDP = $4,100
Therefore, the answer is (b) $4,100.
To calculate the gross domestic product (GDP) of a country, we need to add up the values of consumption, investment, government spending, and net exports (exports - imports).
The given values are:
Consumption: $2,000
Investment: $1,000
Government Spending: $1,000
Imports: $500
Exports: $600
To calculate the GDP, we need to add these values together:
GDP = Consumption + Investment + Government Spending + Net Exports
Net Exports = Exports - Imports
Net Exports = $600 - $500
Net Exports = $100
GDP = $2,000 + $1,000 + $1,000 + $100
GDP = $4,100
Therefore, the gross domestic product of this hypothetical country is $4,100.
The answer is (b) $4,100.