If in some country personal consumption expenditures in a specific year are $70 billion, purchases of stocks and bonds are $35billion, net exports are -$40 billion, government purchases are $60 billion, sales of second-hand items are $8 billion, and gross investment is $25 billion, what is the country's GDP for the year? What is NDP for year?

Answered: If in some country personal consumption…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter19: The Macroeconomic Perspective

Section: Chapter Questions

Problem 1SCQ: Country A has export sales of 20 billion, government purchases of 1,000 billion, business investment...

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Question

If in some country personal consumption expenditures in a specific year are $70 billion, purchases of stocks and bonds are $35billion, net exports are -$40 billion, government purchases are $60 billion, sales of second-hand items are $8 billion, and gross investment is $25 billion, what is the country's GDP for the year? What is NDP for year?

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Step 1

Introduction

The value of all finished products and services generated in the economy over a specific time period is represented by the gross domestic product. It displays how well the economy is doing. A country is deemed wealthy if it has a high GDP. A country is deemed to have a bad economy if its GDP is low.

In contrast to GDP, NDP also accounts for the declining amount spent on fixed assets (such as computers, buildings, automotive parts, equipment, etc.) employed in the manufacturing phase.