Question

Select the best answer.

The Bureau of Economic Analysis and the U.S. Department of Commerce reported the following information:

government expenditures $1.83 trillion
consumption expenditures $6.80 trillion
imports $1.47 trillion
income tax collected $7.88 trillion
investments $2.03 trillion
exports $1.09 trillion

What is the gross domestic product?

$16.51 trillion

$11.39 trillion

$10.28 trillion

Answer 1

To calculate the Gross Domestic Product (GDP), we can use the expenditure approach, which is summarized by the formula:

\[
GDP = C + I + G + (X - M)
\]

where:
- \( C \) is consumption expenditures
- \( I \) is investments
- \( G \) is government expenditures
- \( X \) is exports
- \( M \) is imports

Given the values from the problem:
- \( C = 6.80 \) trillion
- \( I = 2.03 \) trillion
- \( G = 1.83 \) trillion
- \( X = 1.09 \) trillion
- \( M = 1.47 \) trillion

We can plug these values into the formula:

\[
GDP = 6.80 + 2.03 + 1.83 + (1.09 - 1.47)
\]

Calculating the net exports \( (X - M) \):

\[
X - M = 1.09 - 1.47 = -0.38
\]

Now substituting it back into the equation:

\[
GDP = 6.80 + 2.03 + 1.83 - 0.38
\]
\[
GDP = 6.80 + 2.03 + 1.83 - 0.38 = 10.28
\]

Thus, the Gross Domestic Product (GDP) is **$10.28 trillion**.

The best answer is:

**$10.28 trillion**