Question

In: Economics

Use the information in the table below to calculate Net Exports (NX) and gross domestic product...

Use the information in the table below to calculate Net Exports (NX) and gross domestic product (GDP), in billions of dollars.

            Consumption Spending. . . . . .. . . . . . . . . .    $12,000 billion

            Gross Investment Spending . . . . . . . . . . . .   $3,100 billion

            Government Purchases. . . . . .  . . . . . . . . .   $3,400 billion

            Exports            . . . . . . . . . . . . . . . . . . . . . .    $2,200 billion

            Imports            . . . . . . . . . . . . . . . . . . . . . .    $2,700 billion

a)    Net Exports = $

b)    Is this economy experiencing a trade surplus or a trade deficit?

c)   Gross Domestic Product (GDP) = $

Solutions

Expert Solution

Consumption Spending. . . . . .. . . . . . . . . .    $12,000 billion

            Gross Investment Spending . . . . . . . . . . . .   $3,100 billion

            Government Purchases. . . . . .  . . . . . . . . .   $3,400 billion

            Exports            . . . . . . . . . . . . . . . . . . . . . .    $2,200 billion

            Imports            . . . . . . . . . . . . . . . . . . . . . .    $2,700 billion

a)    Net Exports = Export - Import

= $2,200 billion - $2,700 billion

= (-$500) billion

b) This economy is experiencing a trade deficit because import is more than the export.

Trade deficit =($500) billion

c)   Gross Domestic Product (GDP) = Consumption + Investment+ government expenditure +export-Import

=12,000+3,100+3,400+2,200-2,700

=$18,000 billions

Rahul Sunny answered 2 years ago
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