Edit and reply HW1 Print Name Due, January26, 2018 ECO 3203- Intermediatemacroec

Question

Edit and reply HW1 Print Name Due, January26, 2018 ECO 3203- Intermediatemacroeconomics: HWi Write answers on a printed copy of the homework. Do not write on both sides of a page. Staple all pages together. Write legibly in dear sentences. Show all work and provide explanation for full credit. Any evidence of plagiarism will lead to penalties. 1) Citizens of the country of Heehaw produce hay and provide entertainment services (banjo playing). In one year, they produced $15 million worth of hay, with $11 million consumed domestically and the other $4 million sold to neighboring countries. They provided $10 milliorn worth of banjo-playing services, $5 million in Heehaw, and $5 million in neighboring countries They purchased $6 million worth of soda pop from neighboring countries. Calculate the magnitudes of GNP, GDP, net factor payments from abroad and net exports. (15 points)

Explanation / Answer

GNP = Gross national product takes into account all the goods produced by the residents of a HeeHaw.

GDP = Gross domestic product is the number of goods produced within the boundaries of the country, no matter who produced it.

As per the given scenario, the GDP of the nation named HeeHaw will be a sum total of all the goods produced within the boundary of the nation. That is $15 million worth of hay and $5 million worth of banjo playing Toal GDP will be $20 million (as the hay exported were also produced in the nation it will be part of the local GDP)

HeeHaw will have a GNP of $25 million that is $15 million for hay and $10 million for the banjo playing, it will include the amount earned by played by HeeHaw residents in other countries.

Net exports from HeeHaw will be $4 million hay and $5 million banjo service a total of $9 million.

Net factor payment from abroad is $3 million. As HeeHaw made an export of $9 million and imported soda from other nations worth $6 million.

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