ECONOMICS (CBSE/UGC NET)

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ECONOMICS

GDP

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Last year in Linsdellia, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion, net exports was $5 billion, and investment was $2 billion. Hence total expenditure was
A
$24.5 billion.
B
undetermined without information about imports.
C
$34 billion.
D
$34.5 billion.
E
$36.5 billion.
Explanation: 

Detailed explanation-1: -4) The expenditure approach measures GDP by adding A) compensation of employees, rental income, corporate profits, net interest, proprietors’ income, indirect taxes paid, and depreciation and subtracting subsidies paid by the government. B)

Detailed explanation-2: -Consumer spending is the total money spent on final goods and services by individuals and households for personal use and enjoyment in an economy.

Detailed explanation-3: -The expenditure approach to calculating gross domestic product (GDP) takes into account the sum of all final goods and services purchased in an economy over a set period of time. That includes all consumer spending, government spending, business investment spending, and net exports.

Detailed explanation-4: -The major items included in the calculation of GDP include business investment, net exports, individual consumptions, and government expenditures. The GDP calculation does not transfer payments, purchases, and sales of used goods, intermediate goods, etc.

There is 1 question to complete.
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