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17 February, 07:46

In the economy of Ukzten in 2010, consumption was $6000, exports were $1000, GDP was $10,000, government purchases were $2000, and imports were $600. What was Ukzten's investment in 2010?

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  1. 17 February, 09:15
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    I = $1,600

    Explanation:

    We have to clear Investment from the GDP formula:

    GDP = Consumption (C) + Investment (I) + Government expenditure (G) + Net exports (exports-imports)

    I=GDP-G-C - (X-M)

    The problem gives this information:

    GDP: $10,000

    G: $2,000

    C: $6,000

    X: $1,000

    M: $600

    I = $10,000-$2,000-$6,000 - ($1,000-$600)

    Investment in 2010=$1,600
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