The following data apply to a country in its domestic currency units:
| Consumer spending on goods and services | 875,060 | Government spending on goods and services | 305,600 |
|---|---|---|---|
| Business gross fixed investment | 286,400 | Government gross fixed investment | 84,120 |
| Change in inventories | −68,500 | Capital consumption allowance | 8,540 |
| Transfer payments | 9,300 | Statistical discrepancy | −2,850 |
| Exports | 219,800 | Imports | 250,980 |
Using the expenditures approach, the country’s GDP is closest to:
- 1,466,490.
- 1,451,500.
- 1,448,650.
Solution
C is correct. Using the expenditures approach:
GDP = Consumer spending on goods and services + Business gross fixed investment + Change in inventories + Government spending on goods and services + Government gross fixed investment + Exports − Imports + Statistical discrepancy
| Consumer spending on goods and services | 875,060 |
|---|---|
| Business gross fixed investment | 286,400 |
| Change in inventories | (68,500) |
| Government spending on goods and services | 305,600 |
| Government gross fixed investment | 84,120 |
| Exports | 219,800 |
| Imports | (250,980) |
| Statistical discrepancy | (2,850) |
| = Gross domestic product (GDP) | 1,448,650 |
Hi, I know I am asking too much. But it will be great if someone can help. Can you plz tell me a trick (if any) to remember these formulas. I always skip one or the other thing.OR Any way through which i can polish my basics.
Thanks in advance!!