Suppose a country has government expenditures of $3,500, taxes of $2,200, consumption of $9,000, exports of $2,500, imports of $2,700, transfer payments of $750, capital depreciation of $800, and investment of $3,000. GDP equals

A. $24,450

B. $11,550

C. $15,300

D. $20,700

The correct option is C,$15,300

Explanation:

GDP is a short form of Gross Domestic Product which is an indicator of total goods produced in an economy in a period of one year.

Using the expenditure method, GDP van be computed using the below formula:

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

C is the consumption in the economy which is $9000

I is the level of investment at $3,000

G is the government expenditure of $3,500

X is the export of $2,500

M is the import of $2,700

GDP=$9000+$3000+$3500 + ($2500-$2700)

GDP=$15,300

Hence the GDP is $15,300