Transfer payments-S12 Rents-S20 Statistical discrepancy-$10 reciation $50 Intere

Question

Transfer payments-S12 Rents-S20 Statistical discrepancy-$10 reciation $50 Interest $100 Profits (Proprietors' Income/Corporate Profits)-$130 Net Exports (X-M)-S100 Wages-Comp Indirect business taxes- $50 Personal income taxes- $26 Government purchases-S150 Gross Investment-$100 Personal Consumption Expenditures-S310 What is GDP from the expenditure approach? A) S600 B) S750 C) S660 D) S550 E) none of the above ation of employees-S300 2) What is net domestic income at factor prices? A) S650 B) S550 C) S600 D) S750 E) none of the above 3) What is net domestic at market prices? A) S550 B) S750 C) S650 D) S600 E) none of the above

Explanation / Answer

1) GDP(Market price) = C + I + G + NX = 310 + 100 + 150 + 100 = 660. Select C

2) NDP(FC) = GDP(FC) - Depreciation =  Wages + rents + interest + profits + Depreciation - Depreciation = 300 + 20 + 100 + 130 = 550. Select B

3) NDP(MP) = NDP(FC) + Indirect taxes = 550 + 50 = 600. Select D.

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