Q3. In a simple economy, suppose that all income is either compensation of employees or profits. Suppose also that there are no indirect taxes. Calculate gross domestic product from the following set of numbers. Show that the expenditure approach and the income approach add up to the same figure Consumption Investment 10 $9,500 3,000 Depreciation Profits 1,750 2,400 Exports Compensation of employees Government purchases Direct taxes 850 11,500 3,200 1,200 Saving Imports 1,600 900

Q3. In a simple economy, suppose that all income is either compensation of employees or profits. Suppose also that there are no indirect taxes. Calculate gross domestic product from the following set of numbers. Show that the expenditure approach and the income approach add up to the same figure Consumption Investment 10 $9,500 3,000 Depreciation Profits 1,750 2,400 Exports Compensation of employees Government purchases Direct taxes 850 11,500 3,200 1,200 Saving Imports 1,600 900

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Q3. In a simple economy, suppose that all income is either compensation of employees or profits.
Suppose also that there are no indirect taxes. Calculate gross domestic product from the following set
of numbers. Show that the expenditure approach and the income approach add up to the same figure
Consumption
Investment
$9,500
3,000
1,750
Depreciation
Profits
2,400
Exports
Compensation of employees
Government purchases
Direct taxes
850
11,500
3,200
1,200
Saving
Imports
1,600
900

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