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Using the following data, compute the GDP:

- Consumption: $3.2 trillion
- Government purchases: $1.2 trillion
- Export spending: $1.9 trillion
- Import spending: $1.8 trillion
- Investment: $1.5 trillion

What is the GDP?

Answer :

Final answer:

To calculate GDP, you sum the values of consumption, investment, government spending, and net exports (exports minus imports). Using the provided data, the GDP is calculated to be $6.0 trillion.

Explanation:

Calculating GDP Using the Expenditure Approach

To compute the GDP (Gross Domestic Product), we use the expenditure approach formula:
GDP = Consumption + Investment + Government spending + (Exports – Imports) = C + I + G + (X – M).

Given the data:

  • Consumption (C) = $3.2 trillion
  • Investment (I) = $1.5 trillion
  • Government purchases (G) = $1.2 trillion
  • Export spending (X) = $1.9 trillion
  • Import spending (M) = $1.8 trillion

Substituting these values into the equation gives us:

GDP = $3.2 trillion + $1.5 trillion + $1.2 trillion + ($1.9 trillion – $1.8 trillion)
= $3.2 trillion + $1.5 trillion + $1.2 trillion + $0.1 trillion

GDP = $6.0 trillion

Therefore, the calculated GDP is $6.0 trillion.

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Rewritten by : Jeany

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