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27 January, 00:19

Category Billions of Dollars Consumption 200 Depreciation 20 Retained earnings 12 Gross investment 30 Imports 50 Exports 40 Net foreign factor income 10 Government purchases 60 Instructions: Enter your responses rounded to the nearest whole number. a. How much is GDP? $ 342 billion b. How much is net investment? $ 10 billion c. How much is national income? $ 372 billion

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  1. 27 January, 00:45
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    GDP = 280 billion

    Net investment = 10 billion

    National income = 270 billion

    Explanation:

    given data

    Consumption = 200

    Depreciation = 20

    Retained earnings = 12

    Gross investment = 30

    Imports = 50

    Exports = 40

    Net foreign factor income = 10

    Government purchases = 60

    solution

    we get here GDP that is express as

    GDP = Consumption + Gross investment + Government purchases + Net exports ... 1

    Net exports = (Exports - Imports)

    so put here value

    GDP = 200 + 30 + 60 + 40 - 50

    GDP = 280 billion

    and

    Net investment will be as

    Net investment = Gross investment - Depreciation ... 2

    Net investment = 30 - 20

    Net investment = 10 billion

    and

    National income = GDP - Depreciation + Net foreign factor income ... 3

    National income = 280 - 20 + 10

    National income = 270 billion
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