Questions On Gross National Expenditure Essay - 986 Words

Economics Assignment 1 HALINA BINTI HUSSAIN 792153 Question 1 Gross National Expenditure (GNE) is defined as the aggregate national expenditure by all residents of a specific country on final goods and services, namely in the form of private consumption expenditure (C), investments (I) and government expenditure (G). The calculation of GNE does not take into account the origin of the goods and services. GNE and GDP(E) are different. GNE accounts for all final goods and services bought in a specific country including those bought from abroad also known as imports (M). For example, some households may spend on locally produced Peter’s ice cream while other residents may purchase Hà ¤agen-Dazs ice cream imported from USA. Despite their origin, both ice creams are accounted for in GNE. GDP(E) however, is only interested in measuring residents’ expenditure on domestically produced products as well as those goods and services produced domestically but sold in the foreign market known as exports (X). Hence, imports are deducted from the calculation of GNE whilst exports are added in order to arrive at GDP (E). In some circumstances, GDP(E) and GNE can be equal which is when no goods and services are imported nor exported. Another situation would be when total imports equals to total exports, hence trade balance would be zero. Question 2 In a closed economy, it is assumed that the total level of real production (Y) is dependent on the inputs of labour (L) and capitalShow MoreRelatedMacroeconomics641 Words   |  3 PagesIntroduction to Economics EF 110 Take home exercise Due date: Wednesday 27th April 6pm 2011 This assignment must be submitted via moodle EF110 homepage. This assignment accounts for 10% of the final module grade Answer all questions. 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What does GDP tell us? The GDP gives information regarding the country’s economy in regards to total money value on all final goods and services that are produced in the economy over any given time frame - annually or quarterly. Real GDP accounts for priceRead MoreGovernment Spending On Welfare And The Gross Domestic Product1673 Words   |  7 Pageswelfare is one of the biggest categories. Expenditure on welfare is directly extracted from government statistics[1]. There has been a great debate as to whether government spending on welfare has any relationship with the size of a country’s GDP[2]. As such, this research is meant to demystify the situation. The purpose of carrying out this research is to examine any underlying correlation between the government spending in welfare of the people and the gross domestic product. There are two hypotheses