Question

Questions 1-5 Gigaland’s 2019 National Accounts
1. Personal taxes	320
2. Corporateincometaxes	70
3. Indirect taxes less subsidies	100
4. Undistributedcorporateprofits	120
5. Netincomeoffarmandunincorporatedbusiness	240
6. Wages, salaries, and supplementary labour income	1,000
7. Personal consumption expenditures	1,040
8. Capital consumption allowance (depreciation)	180
9. Exports	700
10. Profits of corporations and government enterprises before taxes	240
11.Interest and investment income	80
12. Dividends	90
13. Imports	640
14.Gross investment	340
15.Net investments from non-residents	160
16.Transfer payments to persons	140
17.Government purchases	440

1. Gross Domestic Product (GDP) was
   a) $1,630; b) $1,680; c) $1,790; d) $1,880

2. National Income was
   a) $1,550; b) $1,600; c) $1,750; d) $1,890

3. Personal income was
   a) $1,320; b) $1,470; c) $1,500; d) $1,550

4. Personal disposable income was
   a) $1,150; b) $1,230; c) $1,290; d) $1,380

5. The net addition to the country’s stock of capital good was a) $160; b) $180; c) $210; d) $230

Answer 1

Answer:

1]

GDP = Consumption expenditures + government Purchase + net exports + investment.

= 1040 + 440 + (700 – 640) + 340

= $1880

Correct option: D] $1880

2]

NDP=GDP-depreciation = 1880 – 180 = 1700

NI=NDP + Corporate income taxes = 1700 – 70 = 1630

Correct option: A] $1630

3]

NNI = NDP - indirect taxes less subsidy - corporate tax

= 1700 - 100 - 70

= 1530

PI = NNI - Undistributed Corporate Profits + Transfer payments to persons

= 1530 - 120 + 140

= 1550

Correct option: A] $1550

4]

Personal disposable income = PI - personal income tax

= 1550 - 320

= 1230

Correct option: B] $1230

5]

Net investment = gross investment - depreciation

Net investment = 340 - 180 = $160 .

Therefore, the answer is A] $160.

The net addition to the country’s stock of capital good was $160