Basics of Investing

Archive for January, 2006

Question: How do you solve this economics problem?

This is a national income data

Exports: $15
Net investment: 18
Personal savings: 20
Net exports: 5
Net National income: 290
Direct (personal income) taxes: 30
Gross investment:46
Disposable income: 250
Net investment income from non residents:-7
Undistributed corporation profits: 20
Net income of non-farm unincorporated business: 37
Indirect taxes (less subsidies):40

What is the GDP?

Answer: The GDP of a country is defined as the total market value of all final goods and services produced within a country in a given period of time (usually a calendar year). It is also considered the sum of value added at every stage of production (the intermediate stages) of all final goods and services produced within a country in a given period of time.

The most common approach to measuring and understanding GDP is the expenditure method:

GDP = consumption + investment + (government spending) + (exports − imports), or, GDP = C + I + G + (X-M)

Just plug the numbers in the right spots.

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