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The table below contains data for country A for the year 2010.

Household purchases of durable goods $1293
Household purchases of nondurable goods $1717
Household purchases of services $301
Household purchases of new housing $704
Purchases of capital equipment $310
Inventory changes $374
Purchases of new structures $611
Depreciation $117
Salaries of government workers $1422
Government expenditures on public works $553
Transfer payments $777
Foreign purchases of domestically produced goods $88
Domestic purchases of foreign goods $120

a. What was country A’s GDP in 2010?
b. What was country A’s consumption in 2010?

Respuesta :

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Answer:

(a) Country A's GDP  = $7253

(b) Country A's consumption = $3311

Explanation:

Given Data;

The data is tabulated below

Household purchases of durable goods                       $1293

Household purchases of nondurable goods                   $1717

Household purchases of services                                     $301

Household purchases of new housing                               $704

Purchases of capital equipment                                          $310

Inventory changes                                                                $374

Purchases of new structures                                                $611

Depreciation                                                                           $117

Salaries of government workers                                           $1422

Government expenditures on public works                          $553

Transfer payments                                                                   $777

Foreign purchases of domestically produced goods           $88

Domestic purchases of foreign goods                                   $120

(a)  country A’s GDP in 2010:

GDP which means gross domestic Product simply means the market value of final goods that is manufactured within a particular area over a period of time.

the formula of GDP is given as;

GDP = private consumption + gross investment + government spending  + (exports – imports)

From the table above,

Private consumption=  $1293  +$1717

+ 301  + $704  = $4015

Gross investment =  $310  + $374  +  $611  = $1295

Government spending =   $1422  +   $553  =$1975

Exports – Imports =  $88  - $120 = $-32

Substituting into the formula, we have

GDP = $4015+ $1295+ $1975 + $-32

GDP  = $7253

(b)Country A's consumption:

Country A's consumption = Household purchases of durable goods + Household purchases of nondurable goods + Household purchases of services    

Country A's consumption=  $1293

+  $1717  +  $301

                                            = $3311

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