Exercise 6 (+additional question) in Mankiw:

a. Current account balance = NX + NFI + net transfers from abroad = 400 + 50 + 0. b. GNP = labor income + capital income + depreciation of capital + indirect taxes = 900+400+100+200=1600. c. GDP = GNP – NFI = 1600 – 50 = 1550. d. GDP = C + G+I+NX: 1550 = C + 300 +150+400. C = 1550 – 850=700. e. National saving = Income – consumption ... ................
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