Consider the following information for a small economy:
Consumption: $2,650,000
Investment: $990,000
Government purchases: $1,320,000
Net exports: $−750,000
Depreciation: $421,000
Payments from the rest of the world: $45,000
Payments to the the rest of the world: $80,000
Population: 2,300
 people
What is this country's standard of living? Round your answer to the nearest whole number and enter it in the box.


To determine the country's standard of living, we need to calculate the Gross National Product (GNP) per capita. The GNP represents the total market value of all final goods and services produced by the residents of a country in a given period, including the net income from abroad. 

### Step 1: Calculate Gross Domestic Product (GDP)
\[ \text{GDP} = \text{Consumption} + \text{Investment} + \text{Government Purchases} + \text{Net Exports} \]

Substituting the given values:
\[
\text{GDP} = \$2,650,000 + \$990,000 + \$1,320,000 + (-\$750,000) = \$4,210,000
\]

### Step 2: Calculate Gross National Product (GNP)
\[ \text{GNP} = \text{GDP} + (\text{Payments from the rest of the world}) - (\text{Payments to the rest of the world}) \]

Substituting the given values:
\[
\text{GNP} = \$4,210,000 + \$45,000 - \$80,000 = \$4,175,000
\]

### Step 3: Calculate GNP per capita (Standard of Living)
\[ \text{GNP per capita} = \frac{\text{GNP}}{\text{Population}} \]

Substituting the given values:
\[
\text{GNP per capita} = \frac{\$4,175,000}{2,300} \approx 1815.22
\]

### Final Answer
Rounding to the nearest whole number, the standard of living is **$1,815**.

Would you like further details or have any questions? Here are some related questions:

1. How does GDP differ from GNP?
2. What impact do payments from and to the rest of the world have on GNP?
3. How can net exports influence the overall economy?
4. What role does depreciation play in national accounting?
5. How would an increase in population affect the standard of living?

**Tip:** Understanding the difference between GDP and GNP is key to interpreting economic performance, especially when international transactions are significant.

Understand how to calculate a country's standard of living using GDP, GNP, and per capita calculation. Step-by-step solution to determine GDP, GNP, and the resulting per capita figure. Suitable for college-level students and anyone interested in economic indicators.

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