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SS2: ECONOMICS - 3RD TERM

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  1. Public Finance I | Week 1
    5 Topics
  2. Public Finance II | Week 2
    7 Topics
    |
    1 Quiz
  3. Balanced and Unbalanced Budgets| Week 3
    5 Topics
    |
    1 Quiz
  4. Elements of National Income Accounting | Week 4
    5 Topics
  5. Elements of National Income Accounting II | Week 5
    6 Topics
  6. Income Determination | Week 6
    4 Topics
    |
    1 Quiz
  7. Financial Market | Week 7
    1 Topic
  8. Demand for and Supply of Money | Week 8
    8 Topics
    |
    1 Quiz
  9. Inflation | Week 9
    7 Topics
  10. Deflation | Week 10
    5 Topics
    |
    1 Quiz



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1. What is Gross National Product

2. Given the following National Income data, Compute GNP, NNP, National Income

Billion
Income from employment162.4
Indirect business taxes14.5
Gross capital Formation (Investment)63.2
Transfer payments11.0
Government final consumption expenditure58.7
Exports of goods & service15.0
Private consumption expenditure186.1
Subsides12.4
Personal taxes38.5
Import of goods & Services17.2
Consumption of fixed capital10.5
Net factor income from abroad1.3
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Evaluation Questions

1. What is Gross National Product

Answer – 

GNP refers to the value of goods and services produced within a country during a year plus net income from abroad

GNP = C + I + G  (Closed economy)

GNP = C + I + G + (X – M)

 

2. Given the following National Income data, Compute GNP, NNP, National Income

 Billion
Income from employment162.4
Indirect business taxes14.5
Gross capital Formation (Investment)63.2
Transfer payments11.0
Government final consumption expenditure58.7
Exports of goods & service15.0
Private consumption expenditure186.1
Subsides12.4
Personal taxes38.5
Import of goods & Services17.2
Consumption of fixed capital10.5
Net factor income from abroad1.3

 

GNP

Answer – 

i. GNP = C + I + G + (X – M)

GNP = 186.1 + 63.2 + 58.7 + (15 – 17.2)

= 186.1 + 63.2 + 58.7 – 2.2

= 308 – 2.2 = 305.8

 

NNP

Answer – 

ii. NNP = GNP – Depreciation

= 305.8 – 10.5

= 295.3

Note: Depreciation is also known as consumption of fixed capital

 

National Income

Answer – 

iii. National income = GNP + income from abroad

N.I = GNP + income from Abroad

= 305.8 + (-1.3)

= 305.8 – 1.3

= 304.5

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