Question

1. Sam orders 40 cases of beer from a Dutch distributor at a price of $40 per case. 2. A U.S. company sells 200 transistors to a Spanish company at $15.00 per transistor. 3. Andrew, a U.S. citizen, pays $1,100 for a computer he orders from Dellosoft (a U.S. company)

Complete the following table by indicating how the combined effects of these transactions will be reflected in the U.S. national accounts for the current year. Answer in dollars?

imports ?
exports ?
domestic spending ?
net exports ?
GDP ?

Answer 1

Explanation:

The computation is shown below:

The consumption is

= 40 cases × $40 per case

= $1,600

The import is also same i.e $1,600 because the purchase from Dutch distributor represents the consumption and imports for the United states economy.

Now the exporter is

= 200 transistors × $ 15

= $3,000

Now the net exports is

= Exports - imports

= $3,000 - $1,600

= $1,400

And, the consumption value is $1,100

The total economy consumption is

= $1,600 + $1,100

= $2,700

Now the GDP is

= Consumption + investment + government spending + net exports

= $2,700 + $0 + $0 + $1,400

= $4,100