Question

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?

Answer 1

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