Question

Category	Billions of dollars
Consumption	400
Investment	150
Government spending	80
Exports	210
Imports	60
Foreign income payments to domestic factors	20
Domestic income payments to foreign factors	10
Net unilateral transfers	5

[2 points each] Using the hypothetical U.S. national income and product accounts data from the above table, answer the following:

1. Calculate GNE.
2. Calculate the trade balance.
3. Calculate GDP.
4. Calculate net factor income from abroad.
5. Calculate GNI.
6. Calculate the value of current account.
7. Calculate GNDI.
8. Calculate national savings for U.S.

Answer 1

Solution:-

(a) GNE = C + I + G + X - M

                = 400 + 150 + 80 + 210 – 60

                = 780

(b) Trade Balance = X – M

                                    = 210 – 60

                                    = 150

(c) GDP = GNE = 780

(d) Net factor income from abroad (NFIA) = Foreign income payments to domestic factors - Domestic income payments to foreign factors

= 20 – 10

= 10

(e) GNI = GDP + NFIA

             = 780 + 10

             = 790

(f) Current Account (CA) = X – M + Net unilateral transfers + NFIA

                                       = 210 – 60 + 5 + 10

                                       = 165

(g) GNDI = GNI + Net unilateral transfers

                = 790 + 5

                = 795

(h) National Saving = I + current account balance

                                 = 150 + 165

                                 = $315 billion