Suppose that there are only 2 small countries in the world, Ascot, with a population of...

Suppose that there are only 2 small countries in the world, Ascot, with a population of 31200 people, and delwiche, with a population of 24000 people. Ascot's GDP is equal to 140 million while delwiche's GDP is 224 million. Dellwich GNP has been estimated to be equal to 254 million. The revenue earned by firms that operate in Dellwich but are headquarted in Ascot is equal to 60 million.

What is Ascot's GNP?

In Ascot, the per capita GDP is $?

In Dellwich, the per capita GNP is $?

Solutions

Expert Solution

Net factor income from abroad for Delwich = GNP of Delwich - GDP of Delwich

Net factor income from abroad for Delwich = $254 million - $224 million = $30 million

Net factor income from abroad for Delwich = Revenue earned by firms that operate in Ascot but are headquarted in Delwich - Revenue earned by firms that operate in Dellwich but are headquarted in Ascot

Revenue earned by firms that operate in Ascot but are headquarted in Delwich = Net factor income from abroad for Delwich - Revenue earned by firms that operate in Dellwich but are headquarted in Ascot

Revenue earned by firms that operate in Ascot but are headquarted in Delwich = $30 million + $60 million = $90 million

Calculate NFIA of Ascot -

NFIA = Revenue earned by firms that operate in Dellwich but are headquarted in Ascot - Revenue earned by firms that operate in Ascot but are headquarted in Delwich

NFIA = $60 million - $90 million = -$30 million

Calculate the GNP of Ascot -

GNP = GDP of Ascot + NFIA of Ascot = $140 million - $30 million = $110 million

The Ascot's GNP is $110 million.

Calculate the per capita GDP of Ascot -

Per capita GDP = GDP/Population

Per capita GDP = $140 million/31200 = $4,487.18

The per capipta GDP of Ascot is $4,487.18

Calculate the per capita GNP of Delwich -

Per capita GNP = GNP/Population

Per capita GNP = $254 million/24000 = $10,583.33

The per capita GNP of Delwich is $10,583.33

Rahul Sunny answered 1 year ago

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