Asked by Kevin Nguyen on May 13, 2024
Verified
GDP is $8 trillion.If consumption is $5 trillion,investment is $1 trillion and government purchases are $2 trillion,then
A) exports are equal to imports.
B) net exports are positive.
C) net exports are negative.
D) there is a balance trade deficit.
Net Exports
The value of a country's total exports minus its total imports.
Balance Trade Deficit
A situation where the value of a country's imports exceeds the value of its exports, leading to a negative balance of trade.
Consumption
The use of goods and services by households. It includes expenditures on goods and services, except for purchases of new housing.
- Identify the elements of Gross Domestic Product (consumption, investment, government spending, and net exports) and understand their influence on economic performance.
Verified Answer
SR
Steven ReinigMay 17, 2024
Final Answer :
A
Explanation :
Net exports are calculated as exports minus imports. Given that GDP (Gross Domestic Product) is the sum of consumption, investment, government purchases, and net exports (GDP = C + I + G + NX), and the provided figures add up to the total GDP ($8 trillion = $5 trillion + $1 trillion + $2 trillion), it implies that net exports (NX) are zero. This means exports are equal to imports, indicating a balanced trade.
Learning Objectives
- Identify the elements of Gross Domestic Product (consumption, investment, government spending, and net exports) and understand their influence on economic performance.