Calculating GDP

**Timbuk2**

First year student in college doing a Macroeconomics module, with an upcoming exam which I am studying for.

I have the following problem which I'm struggling to get the answer out for - it's very basic, though.

An economy produces 1,000,000 computers valued at €2,000 each.
Households purchase 200,000 computers of which 100,000 are imported.
Businesses purchase 300,000 domestically produced computers.
The government purchases 300,000 domestically produced computers and 100,000 domestically produced computers are sold abroad.
The unsold computers at the end of year are held in inventory by the computer manufacturers. What is the value of GDP?

Ok, so GDP is equal to the market value of the final goods or services, so clearly GDP should work out as (1,000,000 x 2,000) = €2billion.

But using the expenditure method, I can't get the same answer.
I.e., using GDP = C + I + G + NX.

This is what I did:
Consumers purchase (200,000x2000) = €400m = C

Government purchase (300,000x2000) = €600m = G

100,000 computers are imported, but also 100,000 are sold abroad, so net exports is 0. NX=0

For Investment, businesses buy (300,000x2000)=€600m and 100,000 computers are still left in inventory, so inventory = (100,000x2000)=€200m. Therefore Total Investment = €800m = I

So using GDP = C + I + G + NX
GDP = 400m + 800m + 600m + 0
GDP = €1.8billion

Where am I going wrong?

Thanks in advance

bridster007

There are 200,000 of domestically produced units left in inventory.

**Timbuk2**

Ah yes - I see now. Thank you