END-OF-CHAPTER PROBLEMS Chapter 5 1. Note the following accounting identity for gross national income (GNI): GN =C+/ +G+IB + NFLA Using this expression, show that in a closed economy, gross domestic product (GDP), gross national income (GNI), and gross national expenditures (GNE) are the same. Show that domestic investment is equal to domestic savings. 2. Show how each of the following would affect the U.S. balance of payments. Include a description of the debit and credit items, and in each case identify which specific account is affected (e.g., imports of goods and services, If exports of assets, EX ; and so on). (For this question, you may find it helpful to refer to the Appendix.) a. A California computer manufacturer purchases a $50 hard disk from a Malaysian company, paying the funds from a bank account in Malaysia. b. A U.S. tourist to Japan sells his iPod to a local resident for yen worth $100. c. The U.S. central bank purchases $500 million worth of U.S. Treasury bonds from a British financial firm and sells pound sterling foreign reserves. d. A U.S. owner of Sony shares receives $10,000 in dividend payments, which are paid into a Tokyo bank. e. The central bank of China purchases $1 million of export earnings from a firm that has sold $1 million of toys to the United States, and the central bank holds these dollars as reserves. f. The U.S. government forgives a $50 million debt owed by a developing country