Question

Referring to the table below, fill in the missing data for the country of Birchwood. 500 Expenditures Consumption Gross investment Government spending Net exports 400 130 205 105 Incomes Compensation of employees Gross operating surplus Gross mixed income xes subsidies on production Indirect taxes (net of subsidies) Gross domestic income at market prices B5 45 55 Gross domestic product at market prices Less depreciation Less indirect taxes (net of subsidies) Net domestic product at basic prices 35 55 Less depreciation Less indirect taxes (net of subsidies) Net domestic income at basic prices 35 55 -50 -50 +/- Net foreign factor income Net national product at basic prices +/- Net foreign factor income (Net) national income :01: 1: : 1x Isdel: 120 45 Add transfer payments Less undistributed profit Less corporate profit tax Less other income items Personal income 55 30 210 Less personal income taxes Disposable income Savings Consumption 400 < Prev 8 of 8 !!! Next

Answer 1

1. Calculation of Gross domestic product at market price

Consumption - 400

Gross Investment - 130

Govt spending - 205

Net exports - 105

GDP at mkt price - 400+130+205+105 = 840

2. Net domestic product at basic price = GDP at mkt price -Depreciation - Indirect Taxes = 840 - 35 - 55 =750

3.Net national product at basic price = Net domestic product at basic price - Net foreign factor income =    750-50 = 700

4.​​​​​Gross operating surplus = 840 - 500- 85- 45- 55 = 155

5. Gross domestic income at market price = Compensation of employess + Gross operating surplus + Gross mixed income + taxes less subsidy on production + indirect taxes = 500+155+85+45+55 = 840

6. Net domestic income at basic price = Gross domestic income at market price- Depreciation- indirect taxes = 840- 35- 55 = 750

7. Net national income = net domestic income at basic prices - net foreign factor income = 750- 50= 700

8. Personal Income = Net national income + transfer payment- undistributed profits - corporate profit tax - other income items = 700 +120-45-55-30 = 690

9. Disposable income = personal income - personal income taxes = 690 - 210 = 480

10. Savings = disposable income - consumption = 480 - 400 = 80

400 Expenditures Consumption Gross investment Government spending Net exports 140 210 100 Gross domestic product @ 850 market prices Less depreciation 40 Less indirect taxes (net of 60 subsidies) Net domestic product at basic 750 prices +/- net foreign factor income -50 Net national product at basic 700 prices