Multiple Choice
Which of the following events would cause the supply curve for a good to shift?
87
views
0. Basic Principles of Economics
Introduction to Economics
Multiple Choice
Which of the following equations sums up the components of Gross Domestic Product (GDP)?
A
GDP = C + S + T
B
GDP = C + I + G + NX
C
GDP = P + Q + R + S
D
GDP = M + X + G + I
Verified step by step guidance1
Recall that Gross Domestic Product (GDP) measures the total market value of all final goods and services produced within a country in a given period.
Understand the main components of GDP, which are: Consumption (C), Investment (I), Government Spending (G), and Net Exports (NX), where Net Exports = Exports (X) - Imports (M).
Recognize that the standard GDP formula in macroeconomics is expressed as: \(GDP = C + I + G + NX\).
Analyze each given equation to see if it matches the components of GDP: the correct one should include Consumption, Investment, Government Spending, and Net Exports.
Conclude that the equation \(GDP = C + I + G + NX\) correctly sums up the components of GDP.
Related Videos
Related Practice
