Question #235454
Answer following questions, based on the following information on national income accounts of hypothetical economy: GDP $12,000 Gross investment 1,000 Net investment 600 Net Export 3,000 Government expenditure 1,000 Government budget balance 2,000 Net factor payment from abroad -2,000 Indirect Business Tax 2,000 A) Calculate the gross private consumption expenditure of the economy B) Calculate the Gross National Product (GNP).
Expert's answer
A) The gross private consumption expenditure of the economy is:
C = Y - G - I - NX = 12,000 - 600 - 3,000 - 1,000 = 7,400.
B) The Gross National Product is:
GNP = 12,000 + 2,000 = 14,000.
