Suppose that for the economy of Utopia, we have the following information for 2018: consumption expenditures = $5,000; wages = $3,500; gross private domestic investment = $1,200; government expenditures = $2,000; exports = $900; imports = $1,100. Using the expenditure approach what would the Gross Domestic Product (GDP) be for Utopia in 2018?

Question

A) $6,200
B) $8,000
C) $8,400
D) $11,500
E) $11,900

Answer 1

GDP = consumption expenditures + gross private domestic investment + government expenditures + exports - imports

GDP = $5,000 + $1,200 + $2,000 + $900 - $1,100

GDP = $8,000

Therefore, the answer is B) $8,000.