A Numerical Example

We can use a simple farming economy-to understand how the national. accounts work. Suppose that A Monrovia produces 100 bushels of com and 7 bushels are imported. Of these, 87 bushels are consumed (in C), 10 go for government purchases to feed the army (as G), and 6 go into domestic investment as increases in inventories- (I). In addition, 4 bushels are exported, so net exports (X) are 4 – 7, or minus 3.

What, then, is the composition of the GDP of is the following

GDP = 87 of C+ 10 ofG+ 6 of /- 3 of X

= 100 bushels

[av_button label='Get Any Economics Assignment Solved for US$ 55' link='manually,http://economicskey.com/buy-now' link_target='' color='red' custom_bg='#444444' custom_font='#ffffff' size='large' position='center' icon_select='yes' icon='ue859' font='entypo-fontello']

Share This