{"id":145540,"date":"2024-09-27T11:32:34","date_gmt":"2024-09-27T11:32:34","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=145540"},"modified":"2024-09-27T11:32:36","modified_gmt":"2024-09-27T11:32:36","slug":"calculate-the-gdp-of-dinoland-using-the-expenditures-approach-given-the-following-data","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2024\/09\/27\/calculate-the-gdp-of-dinoland-using-the-expenditures-approach-given-the-following-data\/","title":{"rendered":"Calculate the GDP of Dinoland using the expenditures approach given the following data"},"content":{"rendered":"\n<p>Calculate the GDP of Dinoland using the expenditures approach given the following data: personal consumption expenditures = $10 billion; gross private domestic investment = $5 billion; government spending = $3 billion; exports = $2 billion, imports = $1 billion.<br>a) $12 billion<br>b) $19 billion<br>c) $18 billion<br>d) $17 billion<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>To calculate the GDP of Dinoland using the expenditures approach, we will use the following formula:<\/p>\n\n\n\n<p>[<br>\\text{GDP} = C + I + G + (X &#8211; M)<br>]<\/p>\n\n\n\n<p>Where:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>( C ) = Personal Consumption Expenditures<\/li>\n\n\n\n<li>( I ) = Gross Private Domestic Investment<\/li>\n\n\n\n<li>( G ) = Government Spending<\/li>\n\n\n\n<li>( X ) = Exports<\/li>\n\n\n\n<li>( M ) = Imports<\/li>\n<\/ul>\n\n\n\n<p>Given the data:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>( C = 10 ) billion<\/li>\n\n\n\n<li>( I = 5 ) billion<\/li>\n\n\n\n<li>( G = 3 ) billion<\/li>\n\n\n\n<li>( X = 2 ) billion<\/li>\n\n\n\n<li>( M = 1 ) billion<\/li>\n<\/ul>\n\n\n\n<p>We can plug these values into the formula:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Calculate net exports (exports minus imports):<br>[<br>X &#8211; M = 2 &#8211; 1 = 1 \\text{ billion}<br>]<\/li>\n\n\n\n<li>Now substitute all values into the GDP formula:<br>[<br>\\text{GDP} = C + I + G + (X &#8211; M)<br>]<br>[<br>\\text{GDP} = 10 + 5 + 3 + 1<br>]<br>[<br>\\text{GDP} = 19 \\text{ billion}<br>]<\/li>\n<\/ol>\n\n\n\n<p>Thus, the GDP of Dinoland is <strong>$19 billion<\/strong> (option b).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation<\/h3>\n\n\n\n<p>The expenditures approach to calculating GDP focuses on the total amount spent on the economy&#8217;s final goods and services within a given period. This method provides a comprehensive overview of economic activity, accounting for all components of spending.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Personal Consumption Expenditures (C)<\/strong>: This is the largest component of GDP, representing all private expenditures by households and non-profit institutions. In this case, Dinoland&#8217;s residents spent $10 billion on goods and services.<\/li>\n\n\n\n<li><strong>Gross Private Domestic Investment (I)<\/strong>: This includes business investments in equipment and structures, as well as residential construction. With $5 billion invested, it reflects the economy&#8217;s growth potential.<\/li>\n\n\n\n<li><strong>Government Spending (G)<\/strong>: Government expenditures on goods and services contribute to GDP as well. In Dinoland, government spending was $3 billion, reflecting public sector activity.<\/li>\n\n\n\n<li><strong>Net Exports (X &#8211; M)<\/strong>: This component captures the balance of trade. Exports increase GDP, while imports decrease it. Here, Dinoland had net exports of $1 billion, resulting from $2 billion in exports and $1 billion in imports.<\/li>\n<\/ol>\n\n\n\n<p>Summing these components provides the total GDP of $19 billion, illustrating the overall economic health and activity in Dinoland. This calculation is crucial for policymakers and economists to assess the economy&#8217;s performance and make informed decisions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Calculate the GDP of Dinoland using the expenditures approach given the following data: personal consumption expenditures = $10 billion; gross private domestic investment = $5 billion; government spending = $3 billion; exports = $2 billion, imports = $1 billion.a) $12 billionb) $19 billionc) $18 billiond) $17 billion The Correct Answer and Explanation is : To [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-145540","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/145540","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=145540"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/145540\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=145540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=145540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=145540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}