The national income data for a sovereign country in a given financial year are presented in the table below: | Macroeconomic Component | Value (in billions of Naira) | |---|---| | Personal Consumption Expenditure (C) | 450 | | Gross Private Domestic Investment (I) | 180 | | Government Purchase of Go

The national income data for a sovereign country in a given financial year are presented i… — JAMB UTME

The national income data for a sovereign country in a given financial year are presented in the table below:

Macroeconomic Component	Value (in billions of Naira)
Personal Consumption Expenditure ( $C$ )	450
Gross Private Domestic Investment ( $I$ )	180
Government Purchase of Goods and Services ( $G$ )	140
Exports ( $X$ )	85
Imports ( $M$ )	95
Net Factor Income from Abroad ( $\text{NFIA}$ )	-15
Capital Consumption Allowance (Depreciation)	25

Using the expenditure approach, what is the Gross National Product ( $\text{GNP}$ ) of the economy?

The Gross National Product (GNP) of the economy is ₦745 billion.

Under the expenditure method, Gross Domestic Product (

\text{GDP}

) is derived using the formula

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

. Substituting the given figures gives

\text{GDP} = 450 + 180 + 140 + (85 - 95) = 760

billion Naira. Gross National Product (

\text{GNP}

) is obtained by adding Net Factor Income from Abroad (

\text{NFIA}

) to

\text{GDP}

\text{GNP} = 760 + (-15) = 745

billion Naira.

Calculate Net Exports (X - M)

Net Exports = 85 - 95 = -10 billion Naira

Net exports represent the difference between total exports and total imports.

Calculate Gross Domestic Product (GDP) using the expenditure formula: GDP = C + I + G + (X - M)

GDP = 450 + 180 + 140 + (-10) = 760 billion Naira

The expenditure method aggregates private consumption, gross investment, government spending, and net exports.

Convert GDP to Gross National Product (GNP): GNP = GDP + Net Factor Income from Abroad (NFIA)

GNP = 760 + (-15) = 745 billion Naira

GNP measures total income earned by residents of a country, incorporating net earnings from foreign operations.

Expenditure Method of Measuring National Income and GDP to GNP Conversion

Tahmini Süre:1m 30s