Refer to table 6.1. How much (in billions of $) did the government spend in 2020?

Question

BlackTom AI · Accepted Answer

GDP (expenditure approach) equals Consumption + Investment + Government spending + Net exports, so we can solve for government spending by rearranging that identity.

1) Relevant knowledge points and concepts
- The expenditure method for GDP: GDP = C + I + G + NX, where C = consumption, I = investment, G = government expenditures, NX = net exports (exports − imports).
- Net exports can be negative; that reduces the sum of the other components.

2) Complete reasoning process (step by step)
- We are given: GDP = 1703 (billion $), C = 932, I = 430, NX = −8, and G = ?.
- Rearranged formula: G = GDP − (C + I + NX).

3) Calculations with all intermediate steps
- First compute C + I: 932 + 430 = 1362.
- Add NX (which is −8): 1362 + (−8) = 1362 − 8 = 1354.
- Subtract this from total GDP: G = 1703 − 1354 = 349.

4) Why the correct answer is correct
- The calculation directly applies the GDP identity and uses the given component values. The negative net exports reduce the contribution of trade to GDP, so government spending must be large enough (349 billion $) so that the four components sum to the reported total GDP of 1703 billion $.

5) Briefly why other likely answers would be incorrect
- Omitting net exports or treating NX as +8 instead of −8 would produce incorrect values (for example treating NX as +8 gives G = 1703 − (1362 + 8) = 333, which is wrong). Simple arithmetic errors in adding C and I or subtracting from GDP also lead to incorrect results.

6) Conclusion and final confirmation
- Therefore government expenditures in 2020 equal 349 billion dollars. This matches the provided correct answer: 349.

Refer to table 6.1. How much (in billions of $) did the government spend in 2020?Numerical

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