9.Consider the following firms, and assume that Hong Kong is our domestic economy.Foreign Steel Company,HK-owner, (Firm 1)Domestic Oil Company,Indian-owner (Firm 2)RevenuesForeign Car Company,Italian-owner (Firm 3)Revenues$175$200Revenues$300from salesfrom salesfrom salesExpensesExpensesWages$50ExpensesWages(to domestic$100Wages$70(to(toforeignworkers)workers)workers)Steel$100purchases(from firm 1)Oil$100purchases(from firm 2)Profit$125Profit$100Profit$30Compute the value added by each firm. Then, calculate the GDP and GNP of Hong Kong. Noneed to show derivations.VALUE ADDEDFirm 1Firm 2Firm 3foreign GDPGNP

Answer GDP = It is the sum of all the products and services produced in a country in a year. GNP =…

9. Consider the following firms, and assume that Hong Kong is our domestic economy. Foreign Car Company, Foreign Steel Company, HK-owner, (Firm 1) Domestic Oil Company, Indian-owner (Firm 2) Revenues Italian-owner (Firm 3) Revenues $175 $200 Revenues $300 from sales from sales from sales Expenses Wages $50 Expenses Wages (to domestic $100 Expenses Wages (to foreign $70 (to workers) workers) workers) Steel $100 purchases (from firm 1) Oil $100 purchases (from firm 2) Profit $125 Profit $100 Profit $30 Compute the value added by each firm. Then, calculate the GDP and GNP of Hong Kong. No foreign

9. Consider the following firms, and assume that Hong Kong is our domestic economy. Foreign Car Company, Foreign Steel Company, HK-owner, (Firm 1) Domestic Oil Company, Indian-owner (Firm 2) Revenues Italian-owner (Firm 3) Revenues $175 $200 Revenues $300 from sales from sales from sales Expenses Wages $50 Expenses Wages (to domestic $100 Expenses Wages (to foreign $70 (to workers) workers) workers) Steel $100 purchases (from firm 1) Oil $100 purchases (from firm 2) Profit $125 Profit $100 Profit $30 Compute the value added by each firm. Then, calculate the GDP and GNP of Hong Kong. No foreign

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: A Macroeconomic Theory Of The Open Economy

Section: Chapter Questions

Problem 5PA

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