CIMA BA1 · Chapter 1 · Question 4 of 10
An economy has the following data for a year ($bn): Consumer expenditure 420 Investment 110 Government spending 150 Exports 95 Imports 120 What is gross domestic product at market prices using the expenditure approach?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) $655bn
Explanation
Expenditure GDP = C + I + G + (X - M) = 420 + 110 + 150 + (95 - 120) = $655bn. Imports must be deducted because they are spending on output produced abroad.
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