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# Answer to Question #63109 in Macroeconomics for Awais

Question #63109
You are given the following information about an economy:
Gross Investment $40 Govt. purchases of goods & service 30 GNP 200 X – M - 20 Personal Tax 60 Govt. transfer 25 Interest payments from the Govt. to domestic Pvt. Sector 15 Factor income received from the rest of the would 7 Factor payment made to rest of would 9 Calculate: a. Consumption b) GDP c) Net factor payment from abroad b. Pvt. Saving e) Public Saving. 1 Expert's answer 2016-11-04T12:12:08-0400 a. Consumption = C = GNP – (Govt. transfer + Interest payments from the Govt. to domestic Pvt. Sector) = 200 – (25 + 15) =$160
b. GDP = C + I + G + (X - M) = 160 + 40 + 30 – 20 = $210 c. Net factor payment from abroad (NFIA) = Factor income received from the rest of the world – Factor payment made to rest of world = 7-9 = -$2
d. Pvt. Saving = GDP – Personal Tax – Consumption = 210 – 60 – 160 = -$10 e. Public Saving = Personal Tax - Govt. purchases of goods &amp; service = 60-30 =$30

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