Question: Which is the correct answer and why (explain the calculations/ working out)? A country's GDP is being measured by expenditure. Various categories of expenditure are

Which is the correct answer and why (explain the calculations/ working out)?

A country's GDP is being measured by expenditure. Various categories of expenditure are recorded as follows: Households' spending on consumption = $100bn, Firms' spending on capital goods = $15bn, Firms' addition to inventories = $1bn, Government spending on services = $10bn, Government spending on capital goods = $2bn, Government transfers (social security etc) = $10bn, Exports = $12bn, Imports = $10bn. What is the correct estimate of GDP? Select one: O a. $119bn O b. $140bn O C. $120bn od. $130bn

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