Question

Fill in the Blanks: is the component of GDP that includes spending on new structures and equipment. ANSWER: 2. Consumption is $5.5 trillion, investment is $1 trillion, government expenditures are $1.5 trillion, transfer payments are $.5 trillion, exports are $.75 trillion and imports are $1.25 trillion. GDP is equal to - ANSWER: 3. Foreign countries buy $1.2 trillion of U.S. goods and services. U.S. residents purchase $1.8 trillion of foreign goods and services. What is net exports? ANSWER: 4. In 2012 a country had a real GDP $15.4 trillion and GDP deflator of 125. If that country's GDP deflator equals 115 in 2013, the rate of inflation in 2013 is ANSWER: is the measure that reflects the overall cost of goods and services produced domestically. ANSWER:

Answer 1

1. Investment. The investment component includes investment that businesses make to produce capital goods.

2. GDP= C+I+G+(X-M)

The components of GDP are Personal consumption expenditure ( C ) + Business Investment (I) + Government spending (G) + Net exports ( X-M) i.e. exports minus imports.

GDP= $5.5 trillion + $ 1 trillion + $1.5 trillion + ($0.75 trillion - $1.25 trillion)

= $ 8 trillion -$0.5 trillion= $7.5 trillion.

3. Net exports is exports minus imports.

Exports is $1.2 trillion.

Imports is $ 1.8 trillion.

Net exports is $1.2 trillion - $1.8 trillion= - $ 0.6 trillion.

4. inflation rate between 2012 and 2013 using deflator

(115-125)/125=-8%. Decrease in prices.

5. Gross Domestic Product measures the value of goods and services produced in a year within the country's border.