00:02
So let's go over this question.
00:05
First we need to calculate gdp.
00:08
This measures the value of final goods and services produced in the united states.
00:16
So gdp is going to include personal consumption expenditures plus the gross private domestic investment which equals net private domestic investment plus depreciation plus government purchases plus net exports of goods and services.
01:25
So we're going to fill these in.
01:34
Personal consumption expenditures is equal to 400.
01:42
Then we need to find gross private domestic investment so that's 88 and then add government purchases 128 and then net exports so that would be 7.
02:05
So we have 400 plus 88 plus 128 plus 7 and we get 623.
02:15
Calculate net domestic product.
02:26
This is gdp minus depreciation.
02:47
So depreciation can vary based on the type of capital assets.
02:55
Machinery that is put to regular use may need parts replaced regularly until the entire piece of equipment is no longer usable.
03:06
So that's an example of depreciation.
03:11
So let's look through these and determine which one would go under depreciation.
03:20
So the best one would be consumption of fixed capital.
03:23
So we're going to subtract consumption of fixed capital.
04:04
So subtract that from the gdp and we can get the net domestic product...