Question

The following table shows data on consumption, investment, exports, imports, and government expenditures for Canada in 2008, as published by Statistics Canada. All figures are in billions of dollars. Fill in the missing cells in the table to calculate GDP using the expenditure approach. Note: Type in the results without rounding off numbers. Personal consumption expenditures (C) Gross private domestic investment (I) Exports (X) Imports (M) Net exports of goods and services Government consumption expenditures and gross investment (G) Gross domestic product (GDP) $890.4 370.0 563.9 539.0 314.3 This method of calculating GDP, which involves summing the value added at each stage of production_, is alled the expenditure approach.

Answer 1

Calculate the net exports of goods and services -

Net exports of goods and services = Exports - Imports = $563.9 billion - $539 billion = $24.9 billion

Thus,

The net exports of goods and services is $24.9 billion

Calculate the Gross Domestic Product (GDP) -

GDP = Personal consumption expenditure + Gross private domestic investment + Net exports of goods and services + Government consumption expenditure and gross investment

GDP = $890.4 billion + $370 billion + $24.9 billion + $314.3 billion

GDP = $1,599.6 billion

The GDP is $1,599.6 billion.

Thus,

This method of calculating GDP, which involves summing the value of expenditure incurred on final goods and services by market participants is called the expenditure approach.