The following data summarize the expenditures for the country of XYZ d

The following data summarize the expenditures for the country of XYZ during 2003 in millions of alphabet, the currency of country XYZ.

Gross Private Domestic Investment $300
Business Fixed Investment $200
Change in Inventories $100
Exports $200
Imports $200
Personal Consumption Expenditures $800
Government Consumption Expenditures and Gross Investment $500
Statistical Discrepancy $10
Depreciation Expenditures $50

a. Calculate net exports
b. Calculate GDP
c. Calculate national income
d. Assume that the GDP deflator is 120 and calculate real GDP for 2003.

ANSWER

a. F = X – M = $200 – $200 = 0
b. GDP = C + I + G + F = $800 + $300 + $500 + 0 = $1,600
c. National income = GDP – Depreciation expenditures + Statistical discrepancy = $1,600 – $50 + $10 = $1,560
d. Real GDP = (Nominal GDP/GDP deflator) × 100 = ($1,600/120 ) × 100 = $1,300