Question

Suppose that this year a small country has a gdp of $100 billion. also assume that ig = $30 billion, c = $60 billion, and xn = − $10 billion. what is the value of g?

Answer 1

The government expenditure is $20 billion.

To find the answer, we have to know about the Gross Domestic Product.

How to find the government expenditure?

• The value of all the finished goods and services produced in an economy over the course of a year is determined by the gross domestic product, a macroeconomic metric Gross Domestic Product.

Using the output approach, the gross domestic product is determined as follows:

              $GDP=C+I_g+G+X_n$

Where: C is conception, Ig is the gross investment, G is government expenditure, and Xn is the net exports.

• Thus, the value of G is,

                     $G=GDP-C-I_g-X_n\\G=100-60-30+10=20 billion-dollers.$

Thus, we can conclude that, the government expenditure is $20 billion.

Learn more about the gross domestic product here:

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