Question

Problem 7-4 (Algo) Below is a list of domestic output and national income figures for a certain year. All figures are in billions. The questions that follow ask you to determine the major national income measures by both the expenditures and the income approaches. The results you obtain with the different methods should be the same Category Value Category Value Personal consumption expenditures Net foreign factor income Transfer payments Rents Statistical discrepancy Consumption of fixed capital (depreciation) Social Security contributions Interest Proprietors' income Personal saving $265 Net exports Dividends Compensation of employees Taxes on production and imports Undistributed corporate profits Personal taxes Corporate income taxes Corporate profits Government purchases Net private domestic investment 243 18 21 26 19 56 72 12 14 27 20 13 20 Instructions: Enter your answers as whole numbers a. Using the above data, determine GDP by both the expenditures and the income approaches. Then determine NDP GDP using the expenditures approach billion

Answer 1

The d are rightarrow not properly secure rightarrow have to depend on local government for different issues rightarrow not transparent rightarrow Have to pay yearly to the union these are the disadvantage of the choice of acquiring a company written the European union Expenditure method (G D P) = personal consumption expenditure + net private domestic investment + consumption of fixed capital., depreciation + government purchases + net exports = 265 + 33 + 27 + 72 + 11 = 408 Income method (G D P) = compensation of employees front + interest + proprietor�s income + corporate profits + taxes an production and import + consumption of fixed capital - net foreign factor income + statistical discrepancy = 243 + 14 + 13 + 33 + 56 + 18 - 4 + 8 + 27 = 408 NDP = GDP - consumption of fixed capital depreciation = 408 - 27 = 381 Net domestic product approach: N_1 = NDP - statistical discrepancy + net function factor income = 381 - 8 + 4 = 377