Question
You are given the data below for 2008 for the imaginary country of Amagre, whose currency is the G. Consumption 350 billion G Transfer payments
You are given the data below for 2008 for the imaginary country of Amagre, whose currency is the G.
Consumption 350 billion G
Transfer payments 100 billion G
Investment 100 billion G
Government purchases 200 billion G
Exports 50 billion G
Imports 150 billion G
Bond purchases 200 billion G
Earnings on foreign investments 75 billion G
Foreign earnings on Amagre investment 25 billion G
Given this information we are asked to compute net foreign investment. Some of us are taking earnings on foreign investments - Foreign earnings on Amagre investment = 50 billion G. And others are citing the NFI formula and subtracting imports from exports to get -100 billion G. Which would be correct and why?
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