AP Macroeconomics Question 283: Answer and Explanation

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Question: 283

2. GDP is $10 million, consumer spending is $6 million, government spending is $3 million, exports are $2 million, and imports are $3 million. How much is spent for investments?

  • A. $0 million
  • B. $1 million
  • C. $2 million
  • D. $3 million
  • E. $4 million

Correct Answer: C

Explanation:

C —GDP = C + I + G + (X - M). This would mean that 10 = 6 + I + 3 + (2 - 3); therefore, I = $2 million.