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IB Economics HL 3.1.2 Gdp and Gni Questions

Practise 3.1.2 GDP and GNI in IB Economics HL by reviewing the concepts and applying them to marked questions.

Syllabus
First assessment 2022
Course
Economics HL
Level
HL

Exam points

  • Nominal GDP measures national output within a country
  • Nominal GNI adjusts GDP for net income flows with the rest of the world
  • Calculation: nominal GDP using the expenditure approach
  • Calculation: nominal GNI from data

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Study 3.1.2—GDP and GNI conceptsOpen the corresponding Concept lesson for explanations, examples and exam connections.

IB Economics HL 3.1.2 Gdp and Gni Questions question 1

[Maximum number: 4]

The data in Table 2 refer to Kanyaland, a small, open, developing economy in 2019. All data are in billions of Kanyaland dollars (K$).

Table 2

Table 2

Question (a)

(a)

Using the data in Table 2, calculate factor income sent (paid) abroad in 2019.

Assume that the level of GDP in Kanyaland in 2009 was K$455 billion and government expenditures were K$205\mathrm{K}\$205 billion. For each additional Kanyaland dollar earned as income, it had been estimated that K$0.60\mathrm{K}\$0.60 was spent on domestic goods and services, K$0.10\mathrm{K}\$0.10 was saved, K$0.21\mathrm{K}\$0.21 was paid in taxes and K$0.09\mathrm{K}\$0.09 was spent on imported goods and services.

[ 2 ]

Question (b)

(b)

In many developing countries GNI figures are lower than GDP figures. Outline how this may be due to the high levels of foreign direct investment (FDI) in developing countries.

[ 2 ]
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