Use the following table to derive national income (in billions of dollars). Be s

Question

Use the following table to derive national income (in billions of dollars). Be sure to specify what needs to be subtracted from GDP to find national income. Finally, use the following table to derive personal income and disposable income (in billions of dollars). Again, specify what should be added to and subtracted from national income to arrive at personal income, and what should be subtracted from personal income to arrive at disposable income. The following table shows macroeconomic data for a hypothetical country. All figures are in billions of dollars. Calculate GDP using the expenditure or income method and enter this value (in billions of dollars) into the top row of the following table.

Explanation / Answer

Domestic Income GDP (iNcome Method) = Employee Compensation + (Corporate Profits + Rent + Interest + Profit) + indirect Business Taxes + Depreication + Mixed Income

   = 465 + (65 + 20+25+100 )+25 + 30 + 0 = $ 730

NAtional INcome(NDP) = GDP - Depreciation = 730 - 30 = $ 700

National Income(NI) = NDP - Indirect TAxes = 700 - 25 = $675

Personal Income = NI - Corporate Income TAxes + tRansfer payment

   = 675 - 0 + 55 = 730

Personal Disposable Income = Personale Income - Personal taxes

   = $ 730 - 120 = $ 610

tHANKS

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