Question

Use the table to answer the question.

Consumption $2500
Investment $1000
Government Spending $1000
Imports $500
Exports $1000
The market value for each type of expenditure is given for a hypothetical country in the table above. Calculate the gross domestic product for this country.

(1 point)
Responses

$5,000
$5,000

$4,100
$4,100

$6,000
$6,000

$5,500

Answer 1

To calculate the Gross Domestic Product (GDP) using the expenditure approach, we can use the formula:

\[ \text{GDP} = \text{Consumption} + \text{Investment} + \text{Government Spending} + \text{Exports} - \text{Imports} \]

Now, substituting in the values from the table:

- Consumption = $2500
- Investment = $1000
- Government Spending = $1000
- Exports = $1000
- Imports = $500

Plugging these values into the formula gives:

\[ \text{GDP} = 2500 + 1000 + 1000 + 1000 - 500 \]

Calculating this step by step:

1. First, add Consumption, Investment, Government Spending, and Exports:
\[ 2500 + 1000 + 1000 + 1000 = 5500 \]

2. Then, subtract Imports:
\[ 5500 - 500 = 5000 \]

Thus, the Gross Domestic Product (GDP) for this country is **$5,000**.

The correct response is:

**$5,000**