SIE Exam Question 1013: Answer and Explanation

Question: 1013

A research analyst provides the following economic information for

Country X:

Consumption: $11.4 billion

Government spending: $3.3 billion

Capital consumption allowance: $5.0 billion

Gross private domestic investment: $6.2 billion

Imports: $2.9 billion

Exports: $1.8 billion

What is the gross domestic product (GDP) of Country X?

• A. $17.9 billion
• B. $18.6 billion
• C. $19.8 billion
• D. $24.8 billion

Correct Answer: C

Explanation:

GDP = C + I + G + (X - M)

GDP = $11.4 + $6.2 + $3.3 + ($1.8 - $2.9) = $19.8 billion