Below 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 to determine the major national income measures by both the expenditures and the income approaches. Category Billions Category Personal consumption expenditures $285 Net exports Billions 11 Net foreign factor income 4 Dividends 16 Transfer payments 12 Compensation of employees 263 Rents 14 Taxes on production and imports 18 Statistical discrepancy 8 Undistributed corporate profits 21 Consumption of fixed capital (depreciation) 27 Personal taxes 26 Social Security contributions 20 Corporate income taxes 19 Interest 13 Corporate profits 56 Proprietors' income 43 Government purchases 82 Personal saving 30 Net private domestic investment 33 Instructions: Enter your answers as a whole number. a. Using the above data, determine GDP by both the expenditures approach and the income approach. Then determine NDP. GDP using the expenditures approach = $ GDP using the income approach = $| billion billion NDP = $ billion b. Now determine NI in two ways: first, by making the required additions or subtractions from NDP (method 1); and second, by adding up the types of income and taxes that make up NI (method 2). Method 1 = $ billion Method 2 = $ billion c. Adjust NI (from part b) as required to obtain Pl. PI = $ billion d. Adjust PI (from part c) as required to obtain DI. DI = $ billion
Below 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 to determine the major national income measures by both the expenditures and the income approaches. Category Billions Category Personal consumption expenditures $285 Net exports Billions 11 Net foreign factor income 4 Dividends 16 Transfer payments 12 Compensation of employees 263 Rents 14 Taxes on production and imports 18 Statistical discrepancy 8 Undistributed corporate profits 21 Consumption of fixed capital (depreciation) 27 Personal taxes 26 Social Security contributions 20 Corporate income taxes 19 Interest 13 Corporate profits 56 Proprietors' income 43 Government purchases 82 Personal saving 30 Net private domestic investment 33 Instructions: Enter your answers as a whole number. a. Using the above data, determine GDP by both the expenditures approach and the income approach. Then determine NDP. GDP using the expenditures approach = $ GDP using the income approach = $| billion billion NDP = $ billion b. Now determine NI in two ways: first, by making the required additions or subtractions from NDP (method 1); and second, by adding up the types of income and taxes that make up NI (method 2). Method 1 = $ billion Method 2 = $ billion c. Adjust NI (from part b) as required to obtain Pl. PI = $ billion d. Adjust PI (from part c) as required to obtain DI. DI = $ billion
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Below 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 to determine the major national income measures by both the expenditures and the income approaches.
Category
Billions
Category
Personal consumption expenditures
$285 Net exports
Billions
11
Net foreign factor income
4
Dividends
16
Transfer payments
12
Compensation of employees
263
Rents
14
Taxes on production and imports
18
Statistical discrepancy
8
Undistributed corporate profits
21
Consumption of fixed capital (depreciation)
27
Personal taxes
26
Social Security contributions
20
Corporate income taxes
19
Interest
13
Corporate profits
56
Proprietors' income
43
Government purchases
82
Personal saving
30
Net private domestic investment
33
Instructions: Enter your answers as a whole number.
a. Using the above data, determine GDP by both the expenditures approach and the income approach. Then determine NDP.
GDP using the expenditures approach = $
GDP using the income approach = $|
billion
billion
NDP = $
billion
b. Now determine NI in two ways: first, by making the required additions or subtractions from NDP (method 1); and second, by adding
up the types of income and taxes that make up NI (method 2).
Method 1 = $
billion
Method 2 = $
billion
c. Adjust NI (from part b) as required to obtain Pl.
PI = $
billion
d. Adjust PI (from part c) as required to obtain DI.
DI = $
billion
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