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22 April, 09:30

In an open economy, gross domestic product equals $1,650 billion, government expenditure equals $250 billion, and savings equals $550 billion. What is consumption expenditure?

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  1. 22 April, 12:39
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    Answer: $850 billion

    Explanation:

    Given that,

    Gross domestic product = $1,650 billion

    Government expenditure = $250 billion

    Savings = $550 billion

    GDP = consumption expenditure + Government expenditure + Savings + Net exports

    $1,650 = consumption expenditure + $250 + $550 + 0

    consumption expenditure = $1,650 - $250 - $550

    Therefore, consumption expenditure = $850 billion
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