Using the national-income-accounting identities and your knowledge of nominal-to
ID: 1136481 • Letter: U
Question
Using the national-income-accounting identities and your knowledge of nominal-to-real conversions, fill in the missing data in the previous table.
2000 2000 1996 Constant 1995 NZ$, Millions Constant 1995 NZ$, Millions Current NZ$, Millions GDP Consumption Savings Investment Government Spending 95,670 68,439 63,635 16,997 21,336 22,783 20,464 21,184 on Goods and Services Exports Imports Government Budget 27,084 26,570 39,252 385 38,386 36,497 358 Surplus Taxes Transfer Payments Disposable Income Government 33,427 11,865 74,109 28,574 14,361 13,353 32,380 Expenditure (1995- 100) (1995 100) (1995 100) 107.55 millions 3.78 GDP Price Deflator 101.64 millions 3.65 millions Population 3.78Explanation / Answer
2000 current price
The Production Expenditure Identity:
Y = C + I + G + (EX – IM)
= 68,439 + 22,783 + 20,464 + (1,284 – 39,252)
= 113,718 ·
The Disposable Income Identity
Disposable income = Y – Tax+ Transfer
= 113,718 – 34,440 + 14,361
= 93,639 ·
The Sectoral Deficits Identity:
(Govt-(Tax -Transfer)) + (Invst-Saving) + (Export-Import)
= (20,464-(34,440-14,361)) + (22,783 – 25,200) + (41,284 – 39,252)
= 385 – 2,417 + 2,032
= 0 ·
The Inflow Outflow Identity:
Invst + Govt+ Export = Sav + (Tax-Transfer) + Import
= 22,783 + 20,464 + 41,284 = 25,200 + (34,440-14,361) + 39,252
= 84,531 = 84,531
All four national income accounting identities hold in 2000 (constant dollars)
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