Table 6-4 shows output and income data for the economy of Argonia. Use the table to answer questions .
Table 6-4

-Refer to Table 6-4. What is the value of Argonia's gross national product?
A) $900 billion
B) $1,000 billion
C) $1,100 billion
D) $1,200 billion

Question

Table 6-4 shows output and income data for the economy of Argonia. Use the table to answer questions .
Table 6-4
 
-Refer to Table 6-4. What is the value of Argonia's gross national product?
A) $900 billion 
B) $1,000 billion 
C) $1,100 billion 
D) $1,200 billion

Quizplus · Accepted Answer

Gross national product (GNP) is the total value of all final goods and services produced by a country's residents in a given period of time, regardless of their location. In Table 6-4, the value of consumption expenditure (C) is $800 billion, the value of government expenditure (G) is $200 billion, the value of exports (X) is $300 billion, and the value of imports (M) is $200 billion. Using the formula GNP = C + I + G + (X - M), we get: 
GNP = $800 billion (consumption expenditure) + $0 (investment expenditure) + $200 billion (government expenditure) + ($300 billion - $200 billion) (net exports) 
GNP = $1,100 billion 
Therefore, the value of Argonia's gross national product is $1,100 billion.

Table 6-4 Shows Output and Income Data for the Economy