Describe the difference between GNP and GDP

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Answer the following questions. (a) Describe the difference between GNP and GDP.

(b) Start with the identity GDP = C + I + G + X − M and add and/or subtract whatever is necessary to arrive at GNP. Be sure to identify the current account.

(c) Use the answer to part (b) along with the relationship between GNP, consumption (C), saving (S), and taxes (T), to arrive at the equation below. Be sure to identify private saving, public saving, and investment. S + (T - G) = I + Current Account

Reference no: EM131102416

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