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activity. “Net Exports of Goods and Services” measures a country’s total export value and import value. Exports and imports both effect the GDP differently. If a country is importing more goods and services than it is exporting, then the net exports value will be negative. On the other hand, ifthere is more exporting than importing then the country will have a positive balance of trade. As seen in Table 1 and Table 2 the net exports value is negative, meaning that the country imports more than it exports.For the last quarter the “National Defense” was $746.7 billion, which is 22.2% of “Government Consumption Expenditures and Gross Investment” and 3.8% of GDP (percentages rounded to one decimal place). The data demonstrated in Table 1 and Table 2, along with the other information provided in the Data Exercise shows that keeping track of price change (due to inflation, for example) is necessary to conclude if the country is doing better or worse compared to the other time periods. Also, since real GDP takes into account the price change it is a gives a better prospective of whatthe economic output has been, compared to nominal GDP which provides the total economic output of the country. Income Approach to Calculating GDP1.
DATA EXERCISE #14(2016 Q4)GDP in billions of current dollarsGross Domestic Product18,905.5Gross National Product19,134.5Net National Product16,184.5National Income16,218.9Personal Income16,025.7Table 3: Domestic Product and Income – Table 1.7.5 ()2. Although both GDP and GNP are used to calculate the economic position of a country, GDP measures all sales of goods and services within the US border, or domestically. Whereas, GNP measures production by American workers and/or American-owned businesses no matter where they are located. The difference between “Gross Domestic Product” and “Gross National Product” lies in the names, domestic and national, respectively.GNP can be calculated from the total GDP amount plus income receipts fromthe rest of the world (net income inflow), less (or minus) income payments tothe rest of the world (net outflow). This breakdown can be found in Table 1.7.5, under the Domestic Product and Income section on the Bureau of Economic Analysis website ().