Question

1. Prepare an organization chart explaining the taxes and the Balance level of the Gross Domestic Product.

Answer 1

The tax-to-GDP ratio is used in conjunction with other metrics to measure how much a nation's government controls its economic resources. Tax revenue is the income collected by governments through taxation. It includes revenues from taxes on income, social security contributions, product sales tax, payroll taxes, and other items. However, analysts exclude Social Security payments, fines, and penalties when calculating the tax-to-GDP ratio

Gross Domestic Product (GDP) represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time. GDP is a measure of the size of an economy. It is defined as "an aggregate measure of production equal to the sum of the gross values added of all resident, institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs)" by the OECD (2017).The expenditure method of counting GDP is calculated with the following

formula: GDP (Expenditure) = C + I + G + ( X – M )

Consumption by private citizens [c]

Investment [I]

Government [G]

Export & Import [X & M]

National income is a measure of how much income businesses and households get from using productive resources in a given year.

The way that you calculate national income is to take GNP or GDP and then subtract depreciation and indirect business taxes from the gross national or domestic product.