Consider an economy which comprises of the coal producer, steel producer, and some households. In a given year, the coal producer creates 15 tons of coal and sells it at $5 per ton. The coal manufacturer pays $50 in wages to households. The steel manufacturer uses 25 tons of coal as the input to manufacture, all bought at $5 per ton. Of this, 15 tons are from domestic coal producer and 10 tons are imported. The steel manufacturer manufactures 10 tons of steel and sells it at $20 per ton. Domestic households purchase 8 tons and 2 tons are exported. The steel manufacturer pays $40 in wages. All profits made by the domestic manufacturers go to domestic households.
a. Compute GDP by using each of the three approaches.
b. Compute the current account surplus and GNP. If coal manufacturer is instead owned by foreigners, what is GNP?