CA Foundation P4 · Chapter 5 · Question 5 of 15
In an open economy, private consumption expenditure = Rs. 3,000 crore, gross investment = Rs. 800 crore, government final consumption expenditure = Rs. 900 crore, exports = Rs. 400 crore and imports = Rs. 600 crore. GDP at market prices is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 4,500 crore
Explanation
By the expenditure method, GDP = C + I + G + (X - M) = 3,000 + 800 + 900 + (400 - 600) = 4,700 - 200 = Rs. 4,500 crore. Rs. 4,700 crore ignores net exports, and Rs. 5,700 crore wrongly adds imports.
More Determination of National Income MCQs
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