Question

POSTU b) consumption + investment + government purchases + exports - imports c) the cost of resources + the value added by intermediate industries + the value added by retailers d) coins + currency + bank account balances (Answer) e) all of the above Explain your answer: 3. Suppose 1 million Germans work as consultants in Spain and repatriate their earnings back to Germany. Then the value of their services counts a) as Spanish exports and German imports b) as part of Germany's foreign direct investment in Spain c) as part of Spain's GNI and Germany's GDP 0) as part of Germany's GNI and Spain's GDP (Answer) e) as a transfer of foreign aid from Germany to Spain Explain your answer: o 1 Books @ Select o. O Midterm - B e Macroec

Answer 1

the earning repatriated back to Germany will be considered as part of Germany’s GNI because in the calculation of GNI it considers the total income received by its residents regardless whether they are working in country or abroad
whereas in the case of GDP it calculates the market value of all goods and services produced within a country in specific period of time thus in this case we can see that they are working in Spain thus this will be included in Spain’s GDP