Assume that consumer spending is $1,000, government expenditures are $250, investments by industry are $200, and the excess of exports over imports is $300

Questions:

1. Assume that consumer spending is $1,000, government expenditures are $250, investments by industry are $200, and the excess of exports over imports is $300. Compute the GDP. (please show your work)

2. If we are able to increase our domestic energy production, and that allows us to import less oil from foreign countries, briefly explain what will happen to the GDP.

GDP links:

http://mindtools.net/GlobCourse/formula.shtml

http://www.cliffsnotes.com/study_guide/GDP.topicArticleId-9789,articleId-9733.html

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