GDP CalculationIf the GDP of an economy is $600 billion, the household consumption is $100 billion, government spending is $180 billion, investments are $60 billion and total imports are $100 billion, what will be the value of total exports?$360 billion$175 billion$125 billion$150 billion
Question
GDP CalculationIf the GDP of an economy is 100 billion, government spending is 60 billion and total imports are 360 billion125 billion$150 billion
Solution
The Gross Domestic Product (GDP) is calculated as the sum of household consumption, government spending, investments, and net exports (exports - imports).
Given: GDP = 100 billion Government spending = 60 billion Imports = $100 billion
We can calculate the total exports using the formula:
GDP = Household consumption + Government spending + Investments + (Exports - Imports)
Rearranging the formula to find the value of Exports gives:
Exports = GDP - Household consumption - Government spending - Investments + Imports
Substituting the given values into the formula:
Exports = 100 billion - 60 billion + $100 billion
Exports = $360 billion
So, the value of total exports is $360 billion.
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