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27 December, 22:27

Suppose that this year a small country has a GDP of $100 billion. Also assume that Ig = $30 billion, C = $60 billion, and Xn = - $10 billion. How big is G?

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  1. 27 December, 22:45
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    G = $20 Billion

    Explanation:

    Given that

    C = $60 billion

    GDP = $100 billion

    Gross Investment = $30 billion

    Net export = $10 billion

    Recall that

    GDP = C + Ig + G + Xn

    Therefore

    G = GDP - (C + Ig + Xn)

    G = 100 - (60 + 30 + [-10])

    G = 100 - (90 - 10)

    G = 100 - 80

    G = 20

    Thus, government expenditure is $20 billion.
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Home » Business » Suppose that this year a small country has a GDP of $100 billion. Also assume that Ig = $30 billion, C = $60 billion, and Xn = - $10 billion. How big is G?
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