To find the Real GDP of the given economy in 2020 using the expenditure approach, we need to sum up the following components:
1. Consumption: There was an increase of 20 million dollars in consumption, so the consumption component is 250 million dollars (from 2019) + 20 million dollars = 270 million dollars.
2. Investment: There was a decrease of 5 million dollars in investment, so the investment component is 250 million dollars (from 2019) - 5 million dollars = 245 million dollars.
3. Government spending: There was an increase of 10 million dollars in government spending, so the government spending component is 250 million dollars (from 2019) + 10 million dollars = 260 million dollars.
4. Net exports: The value of all exports decreased by 5 million dollars, and the value of all imports increased by 15 million dollars. Therefore, the net exports component is -5 million dollars - 15 million dollars = -20 million dollars.
Now, we can calculate the Real GDP of the given economy in 2020 by adding up these components:
Real GDP = Consumption + Investment + Government Spending + Net Exports
Real GDP = 270 million dollars + 245 million dollars + 260 million dollars + (-20 million dollars)
Real GDP = 755 million dollars
Therefore, the Real GDP of the given economy in 2020 is 755 million dollars.
Using the expenditure approach, the Real GDP of a given economy was calculated as 250 million dollars in 2019. In 2020, the economy experienced the following:An increase of 20 million dollars in consumption.A decrease of 5 million dollars in investment. An increase of 10 million dollars in government spending.The value of all exports decreased by 5 million dollars.The value of all imports increased 15 million dollars.What is the Real GDP of the given economy in 2020?
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