Using the following national income accounting data, compute GDP by both the exp
ID: 1257448 • Letter: U
Question
Using the following national income accounting data, compute GDP by both the expenditure and income approach [2 points each]. All figures are in billions.
Profits of corporations and government enterprise before taxes $46
Exports $94
Capital allowances $65
Government current purchases of goods and services $113
Net income of farm and unincorporated businesses $24
Taxes less subsidies on factors of production $75
Wages, salaries, supplementary labour income $371
Gross investment $167
Indirect taxes less subsidies on products $11
Interest and investment income $59
Personal consumption expenditure $284 Imports $7
Explanation / Answer
Expenditure Method =
113(Government current purchases of goods and services)
+ 167(Gross investment)
+ 284(Personal consumption expenditure)
+ 94(Exports)
- 7(Imports)
= $651
Income Method =
46(Profits of corporations and government enterprise before taxes)
+ 24(Net income of farm and unincorporated businesses)
+ 371(Wages, salaries, supplementary labour income)
+ 59(Interest and investment income)
+ 65(Capital allowances)
+ 11(Indirect taxes less subsidies on products)
+ 75(Taxes less subsidies on factors of production)
=$651
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