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Measuring Gross Domestic Product

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A) From the following data for the U.S.A., establish the amount of domestic output available for U.S. purchase and the total amount of goods and services available for U.S. purchase: GDP is $1000; gross exports equal $100 while gross imports are $150.

(b) Does U.S. GDP always equal U.S. purchases of goods and services when there are international transactions?

(c) What happen to U.S. GDP when U.S. imports increase ceteris paribus?

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Solution Summary

Ideas are given to establish the amount of domestic output available for U.S. purchase and the total amount of goods and services available for U.S. purchase.

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The amount of domestic output available for U.S. purchase is $900-the $1000 U.S. GDP less the $100
of U.S. output which is exported. The total amount of goods and services available for U.S. purchase is
$1050-the $900 from ...

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