econmoics question, please help!?
1. spending on consumer durables must be $400 million. 2. consumption expenditures are $400 billion. 3. we cannot determine what expenditures on consumption are without more information. 4. consumption expenditures are $200 billion.
Favorite Answer
This is because $1 trillion – $200 billion – $400 billion = $400 billion.
I hope this helps!
The macro-economics formula is:
GDP = C + I + G + (X – M)
C is consumption spending
I is business investment
G is government spending
X is exports
M is imports
Thus:
$1,000 billion (or $1 trillion) = C + $200 billion + $400 billion
C = $400 billion
(C includes all consumption spending, including non-durable goods, so answer 1 is wrong. Answer 3 is wrong because all information is given, and answer 4 is wrong mathematically).
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