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Answer:
GNP can be taken as the total output produced by the citizens.
GNP = Worth of hay + worth of harp music service
GNP = $15 million + $7 million
GNP = $22 million.
GDP can be seen as the total output produced in the country.
GDP = Worth of hay + worth of harp music service in the country
GDP = $15 million + $5 million
GDP = $20 million
Net factor payment from abroad is the difference between GNP and GDP.
Net factor payment from abroad= GNP - GDP
= $22 million - $20 million
= $2 million
Net exports = Hay sold abroad - Imports of soda pop
Net exports = $4 million - $6 million
Net exports = -$2 million
As the harp music played in abroad will not be included in GDP and thus it is not included in net exports
Current Account balance = Net exports + Net factor payments
Current Account balance = -$2 million +$2 million
Current Account balance = $0
Gross Domestic Product (GDP) measures the amount of goods and services that the final product — that is, those purchased by the end-user — produced in the country over a period of time (that is quarter or year).
What is the difference between GNP and GDP?
GDP measures the amount of goods and services produced within national borders, by citizens and non-citizens alike. The GNP measures the amount of goods and services produced by citizens both domestically and abroad.
As per the given information:
Calculation of GNP:
[tex]\rm\,GNP = Worth \;of \;hay + Worth \;of \;harp \;music \;service\\\\GNP = \$15 million + \$7 million\\\\GNP = \$22 million.[/tex]
Calculation of GDP:
[tex]\rm\, GDP = Worth\; of \;hay + Worth \;of \;harp\; music\; service\; in \;the\; country\\\\GDP = \$15 million + \$5 million\\\\GDP = \$20 million[/tex]
Net factor payment from abroad is the difference between GNP and GDP:
[tex]\rm\,Net \;factor \;payment \;from\; abroad = GNP - GDP\\\\\rm\,Net \;factor \;payment \;from\; abroad = \$22 million - \$20 million\\\\\rm\,Net \;factor \;payment \;from\; abroad = \$2 \;million[/tex]
Calculation of net exports:
[tex]\rm\,Net\; exports = Hay\; sold \;abroad - Imports \;of \;soda\; pop\\\\Net\; exports = \$4\; million - \$6 \;million\\\\Net \;exports = -\$2\; million[/tex]
Harp music played abroad will not be included in GDP and therefore it is not included in net exports.
[tex]\rm\,Current \;Account\; balance = \;Net \;exports + Net\; factor \;payments\\\\Current \;Account \;balance \;= -\$2 \;million +\$2\; million\\\\Current\; Account\; balance = \$0[/tex]
Hence, with the given information we have calculated GNP, GDP. net factor payment, net exports, and current account balance.
To learn more about GDP, refer:
https://brainly.com/question/1383956
