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.

In addition to responding with a quantitative answer, briefly describe how you arrived at your answers.

Answer 1

Answer on Question#39860 – Economics – Macroeconomics

Assignment

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.

In addition to responding with a quantitative answer, briefly describe how you arrived at your answers.

Solution

1) Net foreign investment = earnings on foreign investments - payments made to foreign investors = 75 - 25 = 50 billion G

2) Net exports = Exports - Imports = 50 - 150 = -100 billion G

3) GDP = Consumption + Government purchases + Investment + Net imports = 350 + 200 + 100 - 100 = 550 billion G

4) GNP = Consumption + Government purchases + net foreign investment + Net imports = 350 - 100 + 100 - 100 = 250 billion G