The following data summarize the expenditures for the country of XYZ during 2003
ID: 1197216 • Letter: T
Question
The following data summarize the expenditures for the country of XYZ during 2003 in millions of alphabet, the currency of country XYZ.
Gross Private Domestic Investment
$300
Business Fixed Investment
$200
Change in Inventories
$100
Exports
$200
Imports
$200
Personal Consumption Expenditures
$800
Government Consumption Expenditures and Gross Investment
$500
Statistical Discrepancy
$10
Depreciation Expenditures
$50
b. Calculate GDP
c. Calculate national income
d. Assume that the GDP deflator is 120 and calculate real GDP for 2003.
Gross Private Domestic Investment
$300
Business Fixed Investment
$200
Change in Inventories
$100
Exports
$200
Imports
$200
Personal Consumption Expenditures
$800
Government Consumption Expenditures and Gross Investment
$500
Statistical Discrepancy
$10
Depreciation Expenditures
$50
Explanation / Answer
1. Calculate Net exports
Net Exports:
$
Total Exports
200
Total Imports
200
Net Exports
0
2. Calculate GDP
GDP Calculation:
$
Personal Consumption Expenditure
800
Govt Expenditure and Investment
500
Gross Private Domestic Investment
300
Business Fixed Investment
200
Change In Inventory
100
Total Exports
200
Total Imports
(200)
Statistical Discrepancy
(10)
Gross Domestic Product
1,890
3. Calculate National Income
$
Gross Domestic Product
1,890
Less: Depreciation
(50)
National Income
1,840
4. Assume the GDP Deflator is 120 and calculate the real GDP for 2003.
GDP Deflator= (Nominal GDP/Real GDP)*100
Where x=Real GDP
120=(1890/x)*100
x=(1890*100)/120
x= 189000/120
x=$1575
Net Exports:
$
Total Exports
200
Total Imports
200
Net Exports
0
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