1 whole sheet; Due Monday
a) From the table below, calculate the following:
- gross private investment
- net exports
- gross domestic product
- net national product
- national income
- personal income
- disposable income
Transfer payments: 15
Subsidies: 5
Social insurance payments: 35
Depreciation: 50
Receipts of factor income from the rest of the world: 4
Government purchases: 75
Imports: 50
Payments of factor income to the rest of the world: 5
Personal interest income from gov't and households: 35
Indirect taxes: 20
Exports: 60
Net private domestic investment: 100
Personal taxes: 60
Corporate profits: 45
Personal consumption expenditures: 250
Dividends: 4
b) How do we know that calculating GDP by the expenditures approach yields the same answer as calculating GDP by the income approach?
c) Why do we bother to construct real GDP if we already have nominal GDP?
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