Question

The following table contains some information from the national income and product accounts of a small country. All data are in billion dollars.

Category	Value
Government Consumption and Gross Investment	300.00300.00
National Income	1 comma 2701,270
Depreciation	40.0040.00
Exports	150.00150.00
Compensation of Employees	840.00840.00
Receipts of Factor Income from the Rest of the World	50.0050.00
Net Investment	160.00160.00
Inventory Adjustment	0.00
Imports	160.00160.00
Payments of Factor Income to the Rest of the World	40.0040.00
Corporate Profits	250.00250.00
Statistical Discrepancy	10.0010.00

For this​ country:

NNP

equals

$

billion. ​(Enter your response as an​ integer.)

GNP

equals

​$

billion. ​(Enter your response as an​ integer.)

GDP

equals

​$

billion. ​(Enter your response as an​ integer.)

Personal Consumption Expenditure equals

​$

billion. ​(Enter your response as an​ integer.)

Answer 1

Solution:-

(1). NNP = National income + statistical discrepancy

              = $1270 billion + $10.00 billion

               = $1280 billion

(2).GNP = NNP + Depreciation

              = $1280 billion + $ 40.00 billion

                = $1320 billion

3) GDP = GNP - Net factor income from the rest of the world

= GNP - [factor income form the rest of the world - factor income to the rest of the world]

= $1320 billion - [$50 - $40 billion]

= $1320 billion - $10 billion

GDP = $1310 billion

4) GDP= C+ I + G + NX

$1310 = C + [$160.00 + $40.00 billion] + $300.00 billion +[ $150 - $160 billion]

$1310 = C + $200 billion + $300 billion - $10 billion

$1310 = C + $490 billion

$1310 billion - $490 billion = C

C = $820 billion

Hence, personal consumption expenditure is $820 billion.

Note:-

1) Gross investment = Net investment + Depreciation

2) Net Export = Export - Import