The following information has been gathered from the economy of Caines. All amou

Question

The following information has been gathered from the economy of Caines. All amounts are in billions of dollars. Note: The statistical discrepancy is zero. Consumption $2,200 Indirect business taxes $100 Exports $400 Employee compensation $1,800 Gross private investment $450 Rent $80 Government purchases $600 Net foreign factor income $50 Interest $220 Depreciation $350 Imports $550 Profits $700 Proprietors' income $400 6. What is the value of GDP? A. $3,500 billion B. $3,100 billion C. $2,500 billion D. $4,100 billion

Explanation / Answer

B. $3,100 billion Expenditure approach: Y = C+I+G+Ex-Im = 2'200+450+600 +400-550 = 3'100

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