The following macroeconomic indicators (in billions of Naira) were released for an open economy during a given fiscal period: | Macroeconomic Component | Amount (₦ billion) | | :--- | :--- | | Household Final Consumption Expenditure (C) | 400 | | Government Final Consumption Expenditure (G) | 150 |

The following macroeconomic indicators (in billions of Naira) were released for an open ec… — JAMB UTME

The following macroeconomic indicators (in billions of Naira) were released for an open economy during a given fiscal period:

Macroeconomic Component	Amount (₦ billion)
Household Final Consumption Expenditure ( $C$ )	$400$
Government Final Consumption Expenditure ( $G$ )	$150$
Gross Domestic Fixed Capital Formation	$120$
Increase in Value of Stocks (Inventories)	$30$
Exports of Goods and Services ( $X$ )	$80$
Imports of Goods and Services ( $M$ )	$90$
Net Factor Income from Abroad ( $NFIA$ )	$20$

Using the expenditure method, what is the Gross National Product ( $GNP$ ) at market prices for this economy?

The Gross National Product (GNP) at market prices is ₦710 billion.

Under the expenditure approach, national income is measured as

\text{GDP} = C + I + G + (X - M)

. Here, private consumption (

C

) is

400

, government expenditure (

G

) is

150

, total investment (

I

) is

120 + 30 = 150

, and net exports (

X - M

) is

80 - 90 = -10

. Adding these gives

\text{GDP} = 400 + 150 + 150 - 10 = 690

billion Naira. To find

\text{GNP}

, Net Factor Income from Abroad (

20

billion Naira) is added to

\text{GDP}

, yielding

\text{GNP} = 690 + 20 = 710

billion Naira.

Calculate Total Gross Investment (I)

I = 120 + 30 = 150\text{ billion Naira}

Gross investment consists of Gross Domestic Fixed Capital Formation plus the increase in inventory stocks.

Calculate Net Exports (X - M)

\text{Net Exports} = 80 - 90 = -10\text{ billion Naira}

Net exports equal total exports minus total imports.

Calculate Gross Domestic Product (GDP) using the expenditure formula

\text{GDP} = C + I + G + (X - M) = 400 + 150 + 150 + (-10) = 690\text{ billion Naira}

The expenditure approach aggregates consumption, investment, government spending, and net exports.

Convert GDP to Gross National Product (GNP)

\text{GNP} = \text{GDP} + \text{NFIA} = 690 + 20 = 710\text{ billion Naira}

GNP is derived by adding Net Factor Income from Abroad to GDP.

Expenditure Method of Measuring National Income and GNP Conversion

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