National Income Accounting Problems MULTI PLE CHOICE. Choose the one alternative

Question

National Income Accounting Problems MULTI PLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Question - Given the following Transfer payments-$12 Rents-$20 Statistical discrepancy-$10 Depreciation $50 Interest $100 Profits (Proprietors Income/Corporate Profits)-$130 Net Exports (X-M)-$100 Wages- Compensation of employees-$300 Indirect business taxes-$50 Personal income taxes- $26 Government purchases- $150 Gross Investment-$100 Personal Consumption Expenditures-$310 What is GDP from the expenditure approach? 1) A) $600 B) $750 C) $660 D) $550 E) none of the above 2) What is net domestic income at factor prices? 2) A) $650 B) $550 C) $600 D) $750 E) none of the above 3) Question - Given the following: What is net domestic at market prices? 3) A) $550 B) $750 C) 5650 D) $600 E) none of the above

Explanation / Answer

1) From the expenditure method, GDP is C+I+G+NX

From the given table

GDP at MP = 310+ 100+150+100= 660

the correct option is (c)

2) NDP at FC is given by income approach

NDP at FC= compensation to employees plus operational cost plus mixed income

NDP at FC = 300+ 20+100+130 = 550

the correct option is (B)

3)

NDP at MP= GDP at MP - deprecitaion

= 660-50 = 610

the correct option is (e)

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