Gross domestic product: The gross domestic product is used by economists as a measure of the nation’s economic position. The gross domestic product P is calculated as the sum of personal consumption expenditures C, gross private domestic investment I , government consumption expenditures and gross investment G, and net exports E of goods and services (exports minus imports). All of these are measured in billions of dollars.
a. Find a formula that gives the gross domestic product P in terms of C, I, G, and E.
b. In 2002, personal consumption expenditures was 7303.7 billion dollars, gross private domestic investment was 1593.2 billion dollars, government consumption expenditures and gross investment was 1972.9 billion dollars, and net exports of goods and services was −423.6 billion dollars.
i. Which was larger in 2002, U.S. imports or exports?
ii. Calculate the gross domestic product for 2002.
c. Solve the equation in part a for E.
d. Suppose that in another year the values for C, I, and G remain the same as the 2002 figures, but the gross domestic product is 10,886 billion dollars. What is the net export of goods and services for this year?