Question

If consumption spending is $3 trillion, investment is $800 billion, government spending is $1 trillion, imports are $1.2 trillion, and exports are $900 billion, how much is gdp?

Answer 1

We have not inherited the world from our forefathers we have borrowed ot from our children.

Answer 2

The formula for GDP is given as follows :

GDP = C + I + G + (X - M)

Where :

C = Private consumption

I = Gross investment

G = Government spending

X = Exports

M = Imports

We do the substitution as follows :

We convert the Trillions to billions to work with same units.

1 trillion = 1000 billion.

GDP = 3000 billion + 800 billion + 1000 billion + (900 billion - 1200 billion)

= 4800  billion + (-300 billion)

= 4500 billion

In Trillions this is :

4500/1000 = 4.5 Trillion