I am not sure how to compute the GDP by using the expenditure and income method. I am having…


Question Description:

30

I am not sure how to compute the GDP by using the expenditure and income method. I am having… 1 answer below » I am not sure how to compute the GDP by using the expenditure and income method. I am having difficulty understanding where each item should be categorized under. Document Preview: 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 View complete question » I am not sure how to compute the GDP by using the expenditure and income method. I am having difficulty understanding where each item should be categorized under. Document Preview: 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.
Category
Value
Personal consumption expenditures
$245
Net foreign factor income
4
Transfer payments
12
Rents
14
Statistical discrepancy
8
Consumption of fixed capital (depreciation)
27
Social Security contributions
20
Interest
13
Proprietors’ income
33
Net exports
11
Dividends
16
Compensation of employees
223
Taxes on production and imports
18
Undistributed corporate profits
21
Personal taxes
26
Corporate income taxes
19
Corporate profits
56
Government purchases
72
Net private domestic investment
33
Personal saving
20
a. Using the above data, determine GDP by both the expenditure and the income approaches and then determine NDP. Instructions: Enter only whole numbers. GDP, the expenditure approach: $ billion GDP, the income approach: $ billion NDP: $  billion b. Now determine NI: first, by making the required additions and subtractions from GDP (Method 1), and second, by adding up the types of income and taxes that make up NI (Method 2). Instructions: Enter only whole numbers. Method 1: $ billion Method 2: $ billion c. Adjust NI (from part b) as required to obtain PI. Instructions: Enter only whole numbers. PI = $ billion d. Adjust PI (from part c) as required to obtain DI. Instructions: Enter only whole numbers.. DI = $ billion Attachments: GDP.docx View less » Sep 03 2015 11:27 PM

Answer

30