If personal consumption expenditures are $1 billion,government purchases are $2 billion,gross private domestic investments are $4 billion and net exports are $5 billion,then GDP is:
A)$12 billion
B)$8 billion
C)$7 billion
D)cannot be determined

Question

Quizplus · Accepted Answer

GDP = C + G + I + NX
where,
C = personal consumption expenditures = $1 billion
G = government purchases = $2 billion
I = gross private domestic investments = $4 billion
NX = net exports = $5 billion

GDP = $1 billion + $2 billion + $4 billion + $5 billion
GDP = $12 billion

If Personal Consumption Expenditures Are $1 Billion,government Purchases Are $2