Question

You are given the data below for 2008 for the imaginary country of Amagre, whose currency is the G.

Consumption 350 billion G
Transfer payments 100 billion G
Investment 100 billion G
Government purchases 200 billion G
Exports 50 billion G
Imports 150 billion G
Bond purchases 200 billion G
Earnings on foreign investments 75 billion G
Foreign earnings on Amagre investment 25 billion G

Compute net foreign investment.
Compute net exports.
Compute GDP.
Compute GNP.

Answer 1

Answer on Question #37986 – Economics - Macroeconomics

You are given the data below for 2008 for the imaginary country of Amagre, whose currency is the G.

- Consumption 350 billion G

- Transfer payments 100 billion G

- Investment 100 billion G

- Government purchases 200 billion G

- Exports 50 billion G

- Imports 150 billion G

- Bond purchases 200 billion G

- Earnings on foreign investments 75 billion G

- Foreign earnings on Amagre investment 25 billion G

Compute net foreign investment.

Compute net exports.

Compute GDP.

Compute GNP.

Solution

Net foreign investment = Bond purchases + Earnings on foreign investments = 200 + 75 = 275 (billion G)

Net exports = Exports - Imports = 50 - 150 = -100 (billion)

GDP = C + I + E + G = 350 + 100 + 50 - 150 + 200 = 550 (billion G)

GDP = Gross domestic product

C = Consumer Spending

I = Investment made by industry

E = Excess of Exports over Imports

G = Government Spending

GNP = GDP + Net factor income from abroad = 550 + 75 - 25 = 600 (billion G)

Net factor income from abroad = income earned in foreign countries by the residents of a country – income earned by non-residents in that country