Question

Questions 1-5 Pica's National Data in 2019 (billions of dollars) 140 100 480 280 80 45 30 40 Exports Gross rental income Government expenditures Net investment Imports Indirect Taxes less subsidies Depreciation of capital assets Income of Pica citizens working abroad Income of non-residents working in Pica Personal Income taxes Net foreign income Wages and salaries Personal consumption expenditures Corporate Profits before taxes Government Transfers to persons Corporate income taxes Undistributed corporate profits 35 60 220 800 1000 130 50 30 45 1. Gross Domestic Product (GDP) was a) $1760 b) $1820 c) $1850 d) $1890 2. Gross National Product (GNP) was a) $1760 b) $1820 c) $1855 d) $1875 Personal income was a) $1690 b) $1720 c) $1725 d) $1750 Disposable personal income was a) $1690 b) $1725 c) $1785 d) $1840 5. Personal savings were a) $560 b) $590 c) $690 d) $715.

Answer 1

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	1) GDP=C+Ig+G+Xn;
	where C = Personal consumption expenditures,
	Ig = In + Depreciation = Net investment + Depreciation of capital assets'
	G = Government Expenditure,
	Xn = Exports - Imports
	Now, from the given table we see that C = 1000; Ig = 280 + 30 = 310, G = 480, Xn = 140 - 80 = 60
	Therefore, GDP = 1000 + 310 + 480 + 60 = 1850 (Option C).
	2) GNP = personal consumption expenditures + private domestic investment + government expenditure + net exports + any income earned by residents from abroad - income earned by non- residents within the country
	or, GNP = GDP + Income of Pica citizens working abroad - Income of non-residents citizens working in Pica
	or, GNP = 1850 + 40 - 35 = 1855 (Option C).