Using the following national income accounting data, compute (a) GDP, (b) NDP, a

Question

Using the following national income accounting data, compute (a) GDP, (b) NDP, and (c) NI.All figures are in billions.

Category Value Compensation of employees $216.2 U.S. exports of goods and services 19.8 Consumption of fixed capital 11.8 Government purchases 59.4 Taxes on production and imports 14.4 Net private domestic investment 52.1 Transfer payments 13.9 U.S. imports of goods and services 16.5 Personal taxes 40.5 Net foreign income 2.2 Personal consumption expenditures 239.1 Statistical discrepancy 0.0

Explanation / Answer

Government purchases (G) 59.4

Gross private domestic investment (Ig)((52.1 + 11.8)=63.9)

Net exports (Xn) (19.8 - 16.5) 3.3

Gross domestic product (GDP) =239.1 + 59.4 + 63.9 + 3.3 = $365.7

b) NDP = 365.7-11.8 = $353.9

c) NI = 353.9 -2.2 - 14.4 = $337.3

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