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The country of Meditor, a small country with a closed economy, uses the merit as its currency. Recent national income statistics showed that it had GDP of $600 million merits, taxes of $150 million merits, a budget surplus of $40 billion merits, and investment of $100 billion merits. What were its consumption and government expenditures on goods and services?

Respuesta :

Answer:

d. $390 million merits and $110 million merits

Explanation:

The computation of the consumption and the government expenditure is shown below:

As we know that

Budget Surplus = Taxes - government expenditure

$40  = $150 - government expenditure

So, the government expenditure is $110 million

In addition,

Gross domestic product = Consumption + investment + government expenditure + net exports

$600  = Consumption + $100 + $110  + $0

So, the consumption is

= $600  - $100  - $110

= $390 million

We simply applied the above formulas in order to find out the consumption and government expenditure

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