Recently, the level of GDP has declined by $60 billion in an economy where the marginal propensity to consume is 0.75. Aggregate expenditures must have fallen by $15 billion
Gross Domestic Product (GDP) is a standard measure of the value added produced by the production of goods and services in a country over a given period of time. As such, it also measures the income from its production or the total amount spent on the final goods or services (minus imports).
For example, if country B produces 5 bananas worth $1 and 5 buck loves worth $6 a year, the GDP is $35. Next year, if the price of bananas rises to $2 and production remains the same, country B's GDP will be $40.
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