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In expenditure method GDP is the sum of expenditures of final consumption, investment, government consumption and export revenue.
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- When calculating GDP, the Government Purchases (G) category will include: Group of answer choices a) welfare payment to welfare recipients b) salaries for current US military officers c) unemployment benefits d) social security checks to retireesUsing the formula GDP = National Income + Depreciation + (indirect taxes – subsidies) + Net factor payments to the rest of the world, calculate GDP using the Income Approach. (all figures are in billions of dollars):An Indian citizen living in the US builds a new house in Spokane. In GDP calculations, this would be counted under: Group of answer choices 1) Imports 2) Consumption 3) Government Spending 4) Exports 5) Investment
- Calculate GDP using the Income or Expenditure Approach. (all figures are in billions of dollars): Item Amount ($) Government purchase of goods and services 1,721.6 Exports 1,096.3 Receipts of factor income from the rest of the world 382.7 Depreciation (consumption of fixed capital) 990.8 Net fixed Investments 688.2 Corporate income taxes 265.2 Consumption expenditures 6,739.4 Indirect business taxes 664.6 Imports 1,475.8 Payments of factor income to the rest of the world 343.7 Inventory change 56.5 Social security contributions 702.7 Undistributed corporate profits (retained earnings) 130.3 Government transfer and interest payments 1,366.3 Personal interest payments 286.2 Personal taxes 1,235.7 (b) Using the following data calculate: (i) The number of persons employed. (ii) The number of persons unemployed. (iii) The labour force. (iv) The Labour Force Participation rate. (v) The “official” unemployment rate.(a) Calculate GDP using the Income and (all figures are in billions of dollars): Approach. Amount ($) 1,721.6 1,096.3 Item Government purchase of goods and services Exports Receipts of factor income from the rest of the world Depreciation (consumption of fixed capital) Net fixed Investments 382.7 990.8 688.2 Corporate income taxes Consumption expenditures Indirect business taxes 265.2 6,739.4 664.6 Imports Payments of factor income to the rest of the world Inventory change Social security contributions Undistributed corporate profits (retained earnings) Government transfer and interest payments Personal interest payments Personal taxes 1,475.8 343.7 56.5 702.7 130.3 1,366.3 286.2 1,235.7Using the expenditure approach, calculate GDP using the following data: Item Amount in dollars (billions) Consumption 7,600 Consumption of Durable Goods 1,600 Consumption of Non Durable Goods 2,800 Consumption of Services 3,200 Investment 2,750 Fixed Investment 1,000 Government purchases of Goods & Services 1,675 Government Transfer Payments 450 Exports 750 Imports 1,600 GDP Equals
- When measuring GDP using the income approach, indirect taxes are: added because their value is not included in the main income components of GDP. subtracted because their value is already included in the main income components of GDP. added because they represent income to government agencies. subtracted because they represent net subsidies pay by government agencies. not relevant for the income approach but should be included when calculating the expenditure approach.Expenditure (in thousands) Component Social Security payments $290 Depreciation $60 Gross private investment $740 Exports $210 Imports $350 Salaries earned by foreigners working in Magnolia $170 Household consumption $940 Purchases of raw materials $310 Government purchases $720 Capital income $240 Salaries earned by Magnolian residents working abroad $210 Using the expenditure method, the data show that Magnolia's GDP (in thousands) is $ 2260 . (Enter your response as an integer.) The value of Magnolia's GNP (in thousands) is S (Enter your response as an integer.)Using the expenditure approach, compute the value of the GDP? Transfer Payments $54 Interest Income $150 Depreciation $36 Wages $67 Gross Private Investment (I) $124 Business Profits $200 Indirect Business Taxes $74 Rental Income $75 Net Exports (X-M) $18 Net Foreign Factor Income $12 Government Purchases (G) $156 Household Consumption (C) | $304
- Determine if the following would be included (I) or excluded (E) from the calculation of GDP. (d) An increase in business inventories _______ (e) The income of a tax accountant working for a business _______ (f) Income received from interest on a corporate bond ________ (g) Business expenditures on pollution control equipment ______ (h) Dr. Jung grows tomatoes in his backyard for home consumption _______An economist, measuring GDP, first counted the value of aluminum created by an aluminum producer and then counted the value of a new car that an automaker sold that contains that aluminum. This characterizes: A) Depreciation B) Change in inventories C) Double Counting D) National incomeThe gross domestic product (GDP) of the United States is defined as the market value of all final goods and services produced within the United States in a given period of time. Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2020. 2020 GDP Scenario Included Excluded Fastlane, a Japanese automobile company, produces a sedan at a plant in Indiana on December 14, 2020. A family buys the sedan on December 24. Rotato, a U.S. tire company, produces a set of tires at a plant in Michigan on September 25, 2020. It sells the set of tires to Speedmaster for use in the production of a two-door coupe that will be made in the United States in 2020. (Note: Focus exclusively on whether production of the set of tires increases GDP directly, and ignore the effect of production of the two-door coupe on GDP.) You chop down a cherry tree on your property in California and make a dining room table in…