Data for the country Upper Mongoose is given in the table below: Category Value

Question

Data for the country Upper Mongoose is given in the table below: Category Value Net exports $50 billion Value of new goods and services produced in the underground economy $85 billion Personal consumption expenditures $400 billion Value of the services of stay-at-home parents $35 billion Gross domestic investment $100 billion Government purchases $50 billion Total $720 billion What is Upper Mongooses GDP for the year? $ billion What is the size of the underground economy as a percentage of GDP? % By what percentage would GDP be boosted if the value of the services of stay-at-home spouses were included in GDP? %

Explanation / Answer

1) GDP = private consumption + gross investment + government spending + (exports - imports) Thus, GDP = 450 + 100 + 100 +50 =$700 billion 2) Underground Economy = $80 billion. as% of GDP = (80/700)*100 = 11.42% 3) Stay at home services = $30 billion % increase if included = (30/700)*100 = 4.28%

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