Use the table to answer the question.

Consumption $2,000
Investment $1,000
Government Spending $1,000
Imports $500
Exports $600
The market value for each type of expenditure is given for a hypothetical country in the table above. Calculate the gross domestic product of this country.

(1 point)
Responses

$3,900
3,900 dollars

$5,100
5,100 dollars

$4,100
4,100 dollars

$4,000

1 answer

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:

  1. Calculate exports minus imports:
    \(600 - 500 = 100\)

  2. 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