TABLE 5.2 National Income Accounts (dollar figures are in billions) Using inform
ID: 1109569 • Letter: T
Question
TABLE 5.2 National Income Accounts (dollar figures are in billions)
Using information from Table 5.2, calculate the following: (Please show all workings and mathematical steps)
I. Gross domestic product
II. Net domestic product
III. National income
IV. Personal income
V. Disposable income
Expenditure for consumer goods ans services $2,850 Exports $300 Government purchase of goods and services $810 Social Security taxes $295 Net investment $510 Indirect business taxes $445 Imports $450 Gross investment $700 Corporate income taxes $190 Personal income taxes $875 Corporate retained earnings $210 Net foreign factor income $0 Government transfer payments to households $780 Net interest payments to households $20Explanation / Answer
I.
GDP at MP = C+I+G+net export.
=Expenditure for consumer goods and services
+Gross investment+Government purchase of goods and services
+Exports-Import
=$2,850+700+$810+300-450
=$4,210
II. Net domestic product
NDP at FC= GDP - Depreciation - Indirect business taxes
=GDP - ( gross investment - net investment) -$445
=$4,210 -( 700-510) -445
=$4,210 - 190-445
=$3,575
III. National income
NNP FC= NDP at FC + Net foreign factor income
=$3,575+0
=$3,575
IV Personal income= National income - Undistributed corporate profit - Corporate taxes - social security contributions + transfer payments + interest on public debt
=$3,575 -$210-$190- $295+$780+$20
=$3,680
V. Disposable income = Personal income - Personal income taxes
=$3,680 -$875
=$2,805
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