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Small Country Expenditures and GDP

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A very small country's gross domestic product is $12 million. If government expenditures amount to $7.5 million and gross private domestic investment is $5.5 million, what would be the amount of net exports of goods and services?

How would your answer change if the gross domestic product had been $14 million?

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The expert examines small country expenditures and GDP.

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1. Gross Domestic Product is defined by an online source as, "The monetary value of all the finished goods and services produced within a country's borders in a specific time period". (http://www.investopedia.com/terms/g/gdp.asp#axzz2GOfi4rcA). It includes consumption expenditure, government expenditure, investments and the difference between exports and imports within a defined territory.
Another online source confirms this by providing a formula for the GDP ...

Solution provided by:
Elisa Valdez, PhD
Education
  • Bachelor of Science in Business Administration, University of the Philippines
  • Master in Business Administration, Saint Mary's University
  • Doctor of Philosophy in Education, University of the Philippines
  • Doctor in Business Adminstration (IP), Polytechnic University of the Philippines
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