Question

Question 16 Suppose Country A has a GDP of $4 trillion. Residents of this country earn $300 million from assets they own in foreign countries. Residents of foreign countries earn $500 million from assets they own in Country A. Compute: A) Country A’s GNP. To the Tutor: Please show your formulas and calculations. Be clear and explanatory. Will be much appreciated. Thank you.

Answer 1

Ans.

GBP is a measure of the value of all goods and services produced by country's residents and businesses. It can be calculated as according to the question :

GNP = GDP + net income inflow from foreign country - net income outflow to foreign countries

GDP = $4 trillion

Net income inflow from foreign country = $300 million

Net income outflow to foreign country = $ 500 million

GNP = 4 trillion + 300 million - 500 million

GNP = 4 trillion - 200 million

GNP = 4,000,000,000,000 - 200,000,000

GNP of country A = $ 3,999,800,000,000

( Three trillion nine hundred ninety - nine billion eight hundred million)