KEY QUESTION Below is a list of domestic output and na- tional 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. The results you obtain with the different methods should be the same. Personal consumption expenditures $245 Net foreign factor income 4 Transfer payments 12 Rents 14 Statistical discrepancy 8 Consumption of fixed capital (depreciation) 27 Social Security contributions 20 Interest 13 Proprietors’ income 33 Net exports 11 Dividends 16 Compensation of employees 223 Taxes on production and imports 18 Undistributed corporate profits 21 Personal taxes 26 Corporate income taxes 19 Corporate profits 56 Government purchases 72 Net private domestic investment 33 Net private domestic investment 33 Personal saving 20 a. Using the above data, determine GDP by both the ex- penditures and the income approaches. Then determine NDP.
8. KEY QUESTION Below is a list of domestic output and na-
tional income figures for a certain year. All figures are in
billions. The questions that follow ask you to determine the
major
and the income approaches. The results you obtain with the
different methods should be the same.
Personal consumption expenditures $245
Net foreign factor income 4
Transfer payments 12
Rents 14
Statistical discrepancy 8
Consumption of fixed capital (
Social Security contributions 20
Interest 13
Proprietors’ income 33
Net exports 11
Dividends 16
Compensation of employees 223
Taxes on production and imports 18
Undistributed corporate profits 21
Personal taxes 26
Corporate income taxes 19
Corporate profits 56
Government purchases 72
Net private domestic investment 33
Net private domestic investment 33
Personal saving 20
a. Using the above data, determine
penditures and the income approaches. Then determine
NDP.
b. Now determine NI in two ways: first, by making the re-
quired additions or subtractions from NDP; and second, by
adding up the types of income and taxes that make up NI.
c. Adjust NI (from part b ) as required to obtain PI.
d. Adjust PI (from part c ) as required to obtain DI.
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