Questions: In the table below, you are given data for the country of Sequoia. Exports 176 Government spending 236 Consumption 500 Imports 144 Gross investment 146 Net foreign factor income -36 Depreciation 82 Taxes on products (net of subsidies) 94 a. The value of GDP at market prices is . b. The value of NDP at basic prices is . c. The value of net national product at basic prices (i.e. national income) .

Solution Steps

To calculate the GDP at market prices, we use the expenditure approach formula: \[ \text{GDP} = \text{Consumption} + \text{Gross Investment} + \text{Government Spending} + (\text{Exports} - \text{Imports}) \]

Given data:

• Consumption = 548
• Gross Investment = 148
• Government Spending = 236
• Exports = 176
• Imports = 198

\[ \text{GDP} = 548 + 148 + 236 + (176 - 198) \] \[ \text{GDP} = 548 + 148 + 236 - 22 \] \[ \text{GDP} = 910 \]

To calculate the Net Domestic Product (NDP) at basic prices, we subtract depreciation from GDP and adjust for net taxes on products: \[ \text{NDP} = \text{GDP} - \text{Depreciation} \]

Given data:

• Depreciation = 84

\[ \text{NDP} = 910 - 84 \] \[ \text{NDP} = 826 \]

To calculate the Net National Product (NNP) at basic prices, we adjust NDP for net foreign factor income: \[ \text{NNP} = \text{NDP} + \text{Net Foreign Factor Income} \]

Given data:

• Net Foreign Factor Income = -12

\[ \text{NNP} = 826 - 12 \] \[ \text{NNP} = 814 \]

Final Answer