Answer to Question #123648 in Macroeconomics for Nini

Question

Given information for Country X as below:

Details
$ (million)
Consumers consumption =30$ (million)
Net Investment=20$ (million)
Government Expenditure=30$ (million)
Export=20$ (million)
Import=10$ (million)
Depreciation=10$ (million)
Indirect taxes=25$ (million)
Subsidies=118$ (million)


1)Calculate Gross Domestic Product (GDP) market price for Country X

2)Calculate Gross Domestic Product (GDP) factor cost for Country X

Answer 1

Y= C+I+G+(X-M)

Where Y is the GDP

C personal consumption expenditure

I gross private domestic investment

G government expenditure

(X-M) net export

X is exports and M imports

Y = 30$ +20$ +30$ +(20$- 10$)

Y= 80$ + 10$

Y= 90$ at market price

GDP at factor cost=GDP at market price - depreciation- indirect taxes + subsidies

Y= 90$ - 10$-25$+118$

Y= 173$ at factor cost.