To calculate the gross domestic product (GDP) using the expenditure approach, we use the following formula:
\[ \text{GDP} = \text{Consumption} + \text{Investment} + \text{Government Spending} + (\text{Exports} - \text{Imports}) \]
Using the values from the table:
- Consumption = $2,000
- Investment = $1,000
- Government Spending = $1,000
- Exports = $600
- Imports = $500
Substituting these values into the formula:
\[ \text{GDP} = 2,000 + 1,000 + 1,000 + (600 - 500) \]
Now calculate it step-by-step:
-
Calculate exports minus imports:
\(600 - 500 = 100\) -
Now add all components together:
\(2,000 + 1,000 + 1,000 + 100 = 4,100\)
So, the gross domestic product (GDP) of this hypothetical country is $4,100.
The correct response is:
$4,100
4,100 dollars