Plz add your explanation. Given the following information about the economy of P
ID: 1145158 • Letter: P
Question
Plz add your explanation.
Given the following information about the economy of Pakistan, calculate Pakistan's GDP, Note that the currency of Pakistan is the Rupee. Assume that the values are all current and no conversions need to be made. The Government Purchases: 3.00 Trillions of Rupees Individuals Consume: 10.90 Trillions of Rupees Individuals Save: 5.51 Trillions of Rupees Businesses Invest: 1.40 Trillions of Rupees Foreigners spend: 0.67 Trillions of Rupees to purchase Pakistani firms Pakistan Imports: 2.47 Trillions of Rupees Pakistan Exports: 1.27 Trillions of Rupees Number Trillions of RupeesExplanation / Answer
The GDP in given case is calculated using expenditure method. This is because components provided indicates information that can be used to calculate GDP using expenditure method only.
GDP is calculated using following formula -
GDP = Consumption + Investment + Government purchases + Net exports (Exports - Imports)
Calculate the Pakistan's GDP -
Pakistan's GDP = Individual consume + Businesses Invest + Government purchases + Pakistan exports - Pakistan imports
Pakistan's GDP = 10.09 trillion + 1.40 trillion + 3 trillion + 1.27 trillion - 2.47 trillion = 13.29 trillion
The Pakistan's GDP is 13.29 trillions of Rupees.