Given the following data for the United States in a given year: Consumption = \$12 trillion, Investment = \$3 trillion, Government Spending = \$4 trillion, Net Exports = -\$0.5 trillion. What is the nominal US GDP for that year?

• A. \$15 trillion
• B. \$16.5 trillion
• C. \$19 trillion
• D. \$18.5 trillion

Answer: (D)

Verified step by step guidance

1. Recall the formula for nominal GDP using the expenditure approach: \[GDP = C + I + G + NX\] where \(C\) is Consumption, \(I\) is Investment, \(G\) is Government Spending, and \(NX\) is Net Exports.
2. Identify the values given in the problem: Consumption (\(C\)) = 12 trillion, Investment (\(I\)) = 3 trillion, Government Spending (\(G\)) = 4 trillion, Net Exports (\(NX\)) = -0.5 trillion.
3. Substitute the given values into the GDP formula: \[GDP = 12 + 3 + 4 + (-0.5)\]
4. Add the values step-by-step: first add Consumption and Investment, then add Government Spending, and finally add Net Exports.
5. The result after summing all components will give you the nominal GDP for the year.