Question

Question 1 (4 marks) Below is a list of domestic output and national income figures for a given year. All figures are in billions. The questions that follow ask you to determine the major national income measures by both the expenditure and income methods. The results you obtain with the different methods should be the same 7 $245 541 182 143 585 274 204 130 335 115 Personal consumption expenditures Net foreign factor income Transfer payments Rents Statistical discrepancy Consumption of fixed capital (depreciation) Social security contributions Interest Proprietors' income Net exports Dividends Compensation of employees Taxes on production and imports Undistributed corporate profits Personal taxes Corporate income taxes Corporate profits Government purchases Net private domestic investment Personal saving 160 223 185 210 263 190 568 732 383 206 a. Using the above data, determine GDP by both the expenditure and the income approaches. Then determine NDP (12 Marks). b. Now determine National Income (NI): first, by making the required additions and subtractions from GDP; and second, by adding up the types of income and taxes that make up NI (8 Marks).

Answer 1

08 2008 WEEK 49 1 341 -025 Saturday DECEMBER 06 ons. GDP by expenditure : GBP = consumption tret exp outs. + Governmet purchases t Net investment & Deprecia 11 245 + 335 + 732 + 383+ 274 1969 12 Income method - Rents & Interest & Properierer incomet Dividends et compensation of Emp. & undistibuted profits + cosporate profits & corporate income tos 143+130+ 335+ 160+ 223+ 210+ 190.+568 1969 4 NDP = GDP - Depriciation 1969 - 274 1695 5 (3) NI = NDP + Net factor income from abroad Sunday 07 16 1695+ 541 2936 Things To Do R S JANUARY '09 M T W T F S S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 7 14