GDP Practice

The island nation of Simple gets almost everything they need from the marketplace, except their water (which is supplied by the government). Use the values below to calculate their GDP.

At the current price level, the Simpletons produce the following products for themselves:

Products Produced	Dollar Value
50 tons of fish	$500
75 tons of plums	150
1200 private household sand removal services	600
5 commercial fishing boats for professional fisherpeople	5000
25 tons of lemons	125
100,000 gallons of fresh water (provided by government)	1000

In addition to what they produce for themselves, the Simpletons engage in trade:

Items for International Trade	Dollar Value
50 tons of plums for EXPORT	$100
25 tons of lemons for IMPORT	125

Use the dollar values in the two tables above to complete the chart below. Then transfer the values in the blue boxes to the boxes at the bottom of the page. Finally, add up Simple's GDP.

Consumption	Investment	Gov't Purchases	Exports	Imports
Product	$ Value	Product	$ Value	Product	$ Value	Product	$ Value	Product	$ Value
Fish	500
Total C:		Total I:		Total G:		Total:		Total:
				Total Net Exports (Exports - Imports) =

C + I + G + Xn = GDP

Answer this question: If prices were to go up in Simple, what would happen to the dollar values listed above? Would it necessarily mean that the economy was growing?

Gross National Product:

In each scenario, determine which country will get the GDP and which will get the GNP

A Brazilian toy company manufactures and sells their stuffed animals in Little Rock, Arkansas.

GNP
GDP

Apple, Inc. makes and sells iPhones in Hanoi, Vietnam

GNP
GDP

An American clothing maker has their clothing produced and sold in Caracas, Venezuela

GNP
GDP