Here is a list of domestic output and national income figures for a certain year

Question

Here is a list of domestic output and national income figures for a certain year. All figures are in billions. The questions that follow ask you determine the major national income measures by both the expenditures and the income approaches, The results you obtain with different methods should be the same. A. Using the above data, determine GDP and NDP by both the expenditures and income approaches. Personal consumption expenditures..............
Net foreign factor income earned
Transfer payments...........................
Rents
Consumption of fixed capital (depreciation).......
Social security contributions
Interest.......
Proprietors

Explanation / Answer

a. Using the above data, determine GDP and NDP by the expenditure method. GDP = $388 GDP = C + Igross + G + Xn Igross = Inet + depreciation = 33 + 27 = 60 GDP = 245 + 60 + 72 + 11 = 388 NDP = $361 NDP + C + Inet + G + Xn NDP = 245 + 33 + 72 + 11 = 361 or NDP = GDP - depreciation NDP = 388 - 27 = 361 b. Calculate National Income (NI) by the income method. NI = $339 NI = wages + rents + interest + profits profits = corporate profits + proprietor's income profits = 56 + 33 = 89 NI = 223 + 14 + 13 + 89 = 339

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