Neco 2020 Economics Question 7

Practice essay / theory question 7 from the 2020 Neco Economics examination. This question covers National Income, GDP, GNP, Keynesian multiplier .

Neco 2020 Economics Essay / Theory

Topics: National Income GDP GNP Keynesian multiplier

Question 7 NECO • 2020 • ECONOMICS • essay

The following data are for Country X for the year 2022 (all figures are in billions of Naira): - Consumption (C) = 4,500 - Investment (I) = 1,200 - Government expenditure (G) = 800 - Exports (X) = 600 - Imports (M) = 500 - Net factor income from abroad (NFIA) = 50 - Indirect taxes less subsidies (T) = 300 - Depreciation (D) = 200 Using this information, answer the questions below.

Question Parts

( a )

Calculate the Gross Domestic Product (GDP) at market price using the expenditure approach.

( b )

Using the data above, determine Net National Product at factor cost (NNPFC).

( c )

The government plans to increase its expenditure (G) by 10 % and will finance the increase by borrowing. Assuming the marginal propensity to consume (MPC) is 0.6, discuss qualitatively how this policy is likely to affect the equilibrium level of national income in the short run, using the Keynesian multiplier concept.

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About This Question

This is Neco 2020 Economics Question 7. It is one of the essay questions from the 2020 Neco Economics examination.

The question covers National Income, GDP, GNP, Keynesian multiplier .

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