GDP Problem. Given the following information, compute GDP by either the Expenditures or the Income approach. [You do not have to compute GDP both ways.] Name which of the two approaches you are using, and identify all the accounts (e.g., “All profits” or “Gross Private Investment”) you use in your computation of GDP. All profits $ 800 Government purchases of goods & services 300 Imports 50 Government transfer payments 250 Exports 50 Gross private investment 500 Rent 20 Wages, salaries 5000 Personal saving 1600 Depreciation 60 Net foreign income 0 Personal consumption expenditures 5200 Taxes on production & tariffs 40 Sales of stocks and bonds 1200 Interest 80
Name which of the two approaches you are using, and identify all the accounts (e.g., “All profits” or “Gross Private Investment”) you use in your computation of GDP.
All profits $ 800
Government purchases of goods & services 300
Imports 50
Government transfer payments 250
Exports 50
Gross private investment 500
Rent 20
Wages, salaries 5000
Personal saving 1600
Net foreign income 0
Personal consumption expenditures 5200
Taxes on production & tariffs 40
Sales of stocks and bonds 1200
Interest 80
IDENTIFY: ______________________ APPROACH USED
ACCOUNT $$$$$$$$$$ ACCOUNT $$$$$$$$$$
Consumption $5200 Rent $20
________________ $____________ ______________ $__________
________________ $____________ ________________ $___________
________________ $____________ _______________ $__________
________________ $____________ _______________ $__________
________________ $____________ _______________ $__________
GDP = $____________ GDP = $__________
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