4. The difference between expenditure and income approach to measure GDP resides in: A) Expenditure approach...
4. The difference between expenditure and income approach to measure GDP resides in:
A) Expenditure approach address the question “Who gets income”, while income approach “Who purchases GDP”
B) Expenditure approach counts compensation of employees, rents, interest, proprietor’s income and corporate profit, while income approach counts consumption, investment, government spending and net export
C) From the spending side 70% of national income is paid in wages and benefits, while from income side 72% consists of consumer expenditures
D) The expenditure approach values goods at market prices and measures gross product, while income approach values goods at factor cost and measure net product, the difference being amount of indirect taxes (sales taxes) and subsidies.
Homework Answers
4.
Ans: D.
Explanation: Expenditure method focus on expenditure on final output and hence, measures output at market price whereas income method calculates factor incomes and hence, measures output at factor costs.
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4. The difference between expenditure
and income approach to measure GDP resides in:
A) Expenditure approach...
Problem #1 GDP calculated by the expenditure approach will b income approach, because OA. the dollar...
Problem #1 GDP calculated by the expenditure approach will b income approach, because OA. the dollar value of the expenditure on new goods and services in a year must be equal to he GDP calculated by the the dollar value of the income generated in that year the dollar value of the expenditure on new goods and services in a year is always less than the dollar value of the income generated in that year, since imports are subtracted from...
. To measure GDP by using income approach we need to include: A) Personal consumption, business...
. To measure GDP by using income approach we need to include: A) Personal consumption, business investments, government expenditure and net export B) Compensation of employees and net operating surplus C) The value of goods and services at market prices D) The value of all final goods and services produced anywhere in the world by American producers
1.There are two approaches to measuring gross domestic product (GDP), expenditures approach and income approach. Expen...
1.There are two approaches to measuring gross domestic product (GDP), expenditures approach and income approach. Expenditures approach is comprised of consumption expenditures, investment expenditures, government expenditures plus net exports (exports minus imports). Households create income by supplying their labor to the firms. What items is the incomes approach comprised of? Hint: one item is compensation of employees. 2.Factor incomes are comprised of wages, interest, rent and capital. GDP does not measure certain items, what are they and why? What constitutes...
8. The income approach The following table shows macroeconomic data for a hypothetical country. All figures...
8. The income approach The following table shows macroeconomic data for a hypothetical country. All figures are in billions of dollars. Billions of Dollars $2,300 Gross private domestic investment Depreciation Exports $1,987 $3,120 $200 $4,521 Imports Government purchases of goods and services Personal consumption expenditures Indirect business taxes and misc. items Income received from other countries $6,300 $1,341 $1,118 $1,022 $8,174 $1,895 Income paid to other countries Compensation of employees (wages) Corporate profits Rental income Net interest Proprietors' income $365...
8. The income approach The following table shows macroeconomic data for a hypothetical country. All figures...
8. The income approach The following table shows macroeconomic data for a hypothetical country. All figures are in billions of dollars. Billions of Dollars Gross private domestic investment Depreciation $1,700 $1,387 Exports $2,320 Imports $1,500 $3,921 Government purchases of goods and services Personal consumption expenditures Indirect business taxes and misc. items $5,700 $741 Income received from other countries $518 $422 $7,574 Income paid to other countries Compensation of employees (wages) Corporate profits Rental income Net interest Proprietors' income $1,295 $35...
2. Use the following information to calculate GDP. You may calculate GDP from either the expenditure...
2. Use the following information to calculate GDP. You may calculate GDP from either the expenditure side or the income side of the accounts. 3,200 1,500 Government purchases of goods and services Consumption 11,500 Compensation of employees 9,100 Business structures and equipment investment Residential investment 500 R&D expenditures 200 Corporate profits 1,500 Rent 300 Interest 1,000 Proprietors income 200 Change in business inventories -100 Taxes on production and imports 2,000 Government transfer payments 1,800 Exports 1,500 Imports 2,000 Depreciation 2,000...
Question 2: 2.1 Below is a list of domestic output and national income figures for a...
Question 2: 2.1 Below is a list of domestic output and national income figures for a given year. Calculate the national income level (GDP) by using the expenditure approach. (2) R245 » Personal consumption expenditures Net foreign factor income Rents Consumption of fixed capital Social contributions • Net exports Dividends Compensation of employees Undistributed corporate profits Personal taxes Corporate income taxes Corporate profits . Government purchases . Net private domestic investment Personal saving 2.2 Graphically illustrate the two components of...
2. The circular flow of income and expenditure The income and expenditure approaches to measuring a...
2. The circular flow of income and expenditure The income and expenditure approaches to measuring a nation's GDP can be combined using the circular flow model. Categorize each flow in the following table as part of either aggregate demand or national income. Flow Aggregate Demand National Income Net taxes (NT) O Investment spending (1) Consumption (C) Government purchases (G) OOO Net exports (X - IM) Disposable income (DI) 0 While national income and domestic product must be equal, income must...
So I know the equation for GDP is consumers+investement+Goverment spending +(X-M). but could someone break down...
So I know the equation for GDP is
consumers+investement+Goverment spending +(X-M). but could someone
break down what qualfies as cosumer,investment,goverment spending?
and then solve ?
Answer the question on the basis of the following national income data for the economy. All figures are in billions of dollars. Personal Consumption Expenditures $400 Government Purchases 128 Gross Private Domestic Investment 88 Net Exports Net Foreign Factor Income Consumption of Fixed Capital Taxes on Production and Imports Compensation of Employees 369 Rents Interest...
The table shows some of the items in an economy's National Income and Product Accounts. Amount...
The table shows some of the items in an economy's National Income and Product Accounts. Amount (trillions of dollars) Item Wages Calculate the difference between GDP, GNP, and national income >>> If an answer is negative, include a minus sign. If an answer is positive, do not include a plus sign. GDP minus GNP is S trillion. >>> Answer to 1 decimal place. Government expenditure Interest, rent, and profit Consumption expenditure Investment Net exports Indirect taxes less subsidies Retained profits...
Problem #1 GDP calculated by the expenditure approach will b income approach, because OA. the dollar value of the expenditure on new goods and services in a year must be equal to he GDP calculated by the the dollar value of the income generated in that year the dollar value of the expenditure on new goods and services in a year is always less than the dollar value of the income generated in that year, since imports are subtracted from...
8. The income approach The following table shows macroeconomic data for a hypothetical country. All figures are in billions of dollars. Billions of Dollars $2,300 Gross private domestic investment Depreciation Exports $1,987 $3,120 $200 $4,521 Imports Government purchases of goods and services Personal consumption expenditures Indirect business taxes and misc. items Income received from other countries $6,300 $1,341 $1,118 $1,022 $8,174 $1,895 Income paid to other countries Compensation of employees (wages) Corporate profits Rental income Net interest Proprietors' income $365...
8. The income approach The following table shows macroeconomic data for a hypothetical country. All figures are in billions of dollars. Billions of Dollars Gross private domestic investment Depreciation $1,700 $1,387 Exports $2,320 Imports $1,500 $3,921 Government purchases of goods and services Personal consumption expenditures Indirect business taxes and misc. items $5,700 $741 Income received from other countries $518 $422 $7,574 Income paid to other countries Compensation of employees (wages) Corporate profits Rental income Net interest Proprietors' income $1,295 $35...
2. Use the following information to calculate GDP. You may calculate GDP from either the expenditure side or the income side of the accounts. 3,200 1,500 Government purchases of goods and services Consumption 11,500 Compensation of employees 9,100 Business structures and equipment investment Residential investment 500 R&D expenditures 200 Corporate profits 1,500 Rent 300 Interest 1,000 Proprietors income 200 Change in business inventories -100 Taxes on production and imports 2,000 Government transfer payments 1,800 Exports 1,500 Imports 2,000 Depreciation 2,000...
Question 2: 2.1 Below is a list of domestic output and national income figures for a given year. Calculate the national income level (GDP) by using the expenditure approach. (2) R245 » Personal consumption expenditures Net foreign factor income Rents Consumption of fixed capital Social contributions • Net exports Dividends Compensation of employees Undistributed corporate profits Personal taxes Corporate income taxes Corporate profits . Government purchases . Net private domestic investment Personal saving 2.2 Graphically illustrate the two components of...
2. The circular flow of income and expenditure The income and expenditure approaches to measuring a nation's GDP can be combined using the circular flow model. Categorize each flow in the following table as part of either aggregate demand or national income. Flow Aggregate Demand National Income Net taxes (NT) O Investment spending (1) Consumption (C) Government purchases (G) OOO Net exports (X - IM) Disposable income (DI) 0 While national income and domestic product must be equal, income must...
So I know the equation for GDP is
consumers+investement+Goverment spending +(X-M). but could someone
break down what qualfies as cosumer,investment,goverment spending?
and then solve ?
Answer the question on the basis of the following national income data for the economy. All figures are in billions of dollars. Personal Consumption Expenditures $400 Government Purchases 128 Gross Private Domestic Investment 88 Net Exports Net Foreign Factor Income Consumption of Fixed Capital Taxes on Production and Imports Compensation of Employees 369 Rents Interest...
The table shows some of the items in an economy's National Income and Product Accounts. Amount (trillions of dollars) Item Wages Calculate the difference between GDP, GNP, and national income >>> If an answer is negative, include a minus sign. If an answer is positive, do not include a plus sign. GDP minus GNP is S trillion. >>> Answer to 1 decimal place. Government expenditure Interest, rent, and profit Consumption expenditure Investment Net exports Indirect taxes less subsidies Retained profits...
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