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Assume that consumer spending is $1,000, government expenditures are $250, investments by industry are $200, and the excess of exports over imports is $300

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Questions:

1. Assume that consumer spending is $1,000, government expenditures are $250, investments by industry are $200, and the excess of exports over imports is $300. Compute the GDP. (please show your work)

2. If we are able to increase our domestic energy production, and that allows us to import less oil from foreign countries, briefly explain what will happen to the GDP.

GDP links:

http://mindtools.net/GlobCourse/formula.shtml

http://www.cliffsnotes.com/study_guide/GDP.topicArticleId-9789,articleId-9733.html

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Solution Summary

Customer spending and government expenditures are examined.

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Remember - we can only point you in the right direction at Bmass - we can't really do the work for you.

The good news is that this stuff is fairly easy.

Check out this page: http://staffwww.fullcoll.edu/fchan/macro/2gdp_computation.htm

GDP = consumption + investment + government purchases + the difference between exports and imports.

So it's fairly simple: GDP = 1000 + 250 + 200 + 300 (using your figures in the simplest sense - we are not including any debt here).

The final, export figure ($300 trade surplus) must be positive because the country we're dealing with here has a trade surplus. It is exporting more than it is importing.
Since we don't know (according to the info you gave me) what the ...

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