Purchase Solution

G in GDP component

Not what you're looking for?

Ask Custom Question

3. Does the G in C + I + G + NX represent government spending (total government expenditures) or government purchase? How do government purchases and government spending differ? Does G include government investment?

4. Does the I in C + I + G + NX include purchases of stocks and bonds? Why or why not?

Purchase this Solution
Solution Summary

This solution discusses government purchases and government spending, and the differences between both.

Solution Preview

3. The G in the formula: Y = C + I + G + NX represents Government purchases.
Government purchases include spending on goods and services by local, state and federal governments and gross investment in highways, bridges etc.
Government purchases Vs. Government spending:
• Government purchase is a narrower definition than government ...

Solution provided by:
Radhika Lakshmi, MPhil
Education
  • MPhil, Madurai Kamaraj University
  • MCom, Annamalai University
  • IATA, International Air Transport Association
Recent Feedback
  • "Great explanations on how the answers were obtained."
  • "Love the way she explains everything step by step."
  • "Solutions were thoroughly explained."
  • "Excellent explanations of how problems are solved"
  • "Thanks"
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • GDP components and their importance

    577501 GDP components and their importance Looking at the components of GDP, and trying to see the importance of each component C, I, G, and Xn. Are consumer's purchasing decisions important to the economy?

  • Stagflation, Volatile Component, and Multiplier Effect

    2) Is it false in the equation C + I + G + NX = GDP that the most volatile component is C? 3) The larger the MPC, the smaller the multiplier effect? (True, False?)

  • Gross Domestic Product (GDP)

    GDP = consumption + Investments + Government Purchases + Net Exports GDP = C + I + G + (X - M) where X - exports M - imports Consumption is the largest component of GDP.

  • Small Country Expenditures and GDP

    expenditure G = government expenditure Xn = (X - M); X = exports and M = imports Applying to the problem at hand, the following are given: GDP = $12M G = $7.5M I = $5.5M G + I would already be $13M; hence at $12M GDP, no figure is

  • Effect of Economic Stimulus Under 2 Macroeconomic Theories

    The I component of GDP will decrease, offsetting the increase in G. In the long run, GDP does not change. 3.

  • supply curve

    (Hint: the simple multiplier is the change in equilibrium real GDP when some autonomous component of expenditure, like G, changes by $1 if the price level is held constant.) b) Explain the various terms in the AS curve.

  • Answers to 6 common macroeconomics questions

    The I component of GDP will decrease, offsetting the increase in G. In the long run, GDP does not change. 5.

  • Four basic components of the Aggregate demand

    Total value of economic output GDP generally is defined as the market value of the goods and services produced by a country. One way to calculate a nation's GDP is to sum all expenditures in the country.

  • Aggregate Demand or Aggregate Supply Shocks and Policy Correction

    As you should know, the component of AD are consumption (C), investment (I), government spending (G) or net export (X-M). So anything that influencing any of this component will cause AD to shift from its original situation.

  • Aggregate Demand Declines in 2001

    From Table 1.1.6 find the levels of real GDP, personal consumption expenditures (C), gross private investment (Ig), net exports (Xn), and government consumption expenditures and gross investment (G) in the first and third quarters of 2001.

View More Related Solutions