Economics Assignment - Calculation of Gross Domestic Product (GDP)

Added on - 15 Mar 2020

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Running head: ECONOMICS ASSIGNMENTECONOMICS ASSIGNMENTName of student:Name of University:Author note:
1ECONOMICS ASSIGNMENTTable of ContentsQuestion 1..................................................................................................................................2Question 2..................................................................................................................................5Question 3..................................................................................................................................6Question 4..................................................................................................................................8References................................................................................................................................10
2ECONOMICS ASSIGNMENTQuestion 1Here GDP is to be calculated by following the expenditure method. Expendituremethod calculated gross domestic product (GDP), which totals consumption, investment,government spending and net exports.GDP(Y) = C+I+G+(X-M)Where C=Private ConsumptionPrivate consumption is also called personal consumption. It mainly shows consumer’sexpenditure on personal goods and services. Thus it includes all the aspects of theexpenditure that are borne by consumers. Expenditure on goods and services occurs whenthat good is purchased , however consumption can last for several years depending upon thedurability and the degree of satisfaction it is providing to the consumer (Ilzetzki, Mendoza &Végh, 2013) (Farmer, 2012).
3ECONOMICS ASSIGNMENTI=Gross investmentGross investment mainly shows the amount of sum that is spent by an economy oncapital assets. These capital assets may include property, technology. Machineries,equipments and any other assets that straightly have the ability to improve productioncapacity of an organization (Anghelache, Manole &Anghel, 2015)..G=Government spendingGovernment spending shows the expenditure that is incurred by government. Thisspending by government can be financed by several factors of the economy and these can beborrowing by the government, printing of paper money and the revenue earned by theimplementation of taxes. Changes that occurs in government spending is an importantcomponent of fiscal policy and it is used to stabilize the macroeconomic condition of aneconomy (ERASLAN & TOZLU, 2016.X=ExportsAn export is a matter of international trade that take place between countries , itmainly shows the exchange of good and these goods which are used in export are produced inthe home country while exported to foreign countries. It is regarded as a crucial component ofan economy and this is due to the fact it facilitates international trade and this internationaltrade results in formation of economic growth in an economy and this formation in turnincreases employment opportunities, increases production that helps to achieve desired goalset up the organizations and finally raises the government revenue (Behrens, Corcos & Mion,2013).M=Imports
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