Sub part (a):
Calculation of GDP and NDP.
Sub part (a):
Explanation of Solution
GDP income approach can be calculated as follows.
The value of GDP from expenditure approach is $388.
GDP expenditure approach can be calculated as follows
The value of GDP from income approach is $388.
Net domestic product can be calculated as follows.
The value of net domestic product is $361.
Concept introduction:
Gross Domestic Product (GDP): It is the worth of final goods and services produced in an economy within a particular time framework.
Net Domestic Product (NDP): It is the aggregate money value of all final commodities and services produced in the country in a given time period, minus net
Sub part (b):
Calculation of national income.
Sub part (b):
Explanation of Solution
National income from NDP can be calculated as follows.
National income is $357.
National income from income and tax can be calculated as follows.
National income is $357.
Concept introduction:
Gross Domestic Product (GDP): It is the worth of final goods and services produced in an economy within a particular time framework.
Net Domestic Product (NDP): It is the aggregate money value of all final commodities and services produced in the country in a given time period, minus net depreciation.
Sub part (c):
Calculation of personal income.
Sub part (c):
Explanation of Solution
Personal income can be calculated as follows.
Personal income is $291.
Sub part (d):
Calculation of disposable income.
Sub part (d):
Explanation of Solution
Disposable income can be calculated as follows.
Disposable income is $265.
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Chapter 27 Solutions
Economics (Irwin Economics)
- Typed answer.arrow_forwardStill with the same data on Macroland, a closed economy with no government sector, and with fixed price level and interest rate. Fill-in the blank in the following table, then answer the following question. GDP Yd Iplanned lunplanned 20 22 30 50 30 80 30 100 70 30 The Macroland's government reduced its taxes by 20, the income- expenditure equilibrium is expected to be: O 50 O 80 O 100 O 150arrow_forwardA country's GDP is being measured by the expenditure method. Various categories of expenditure are recorded as follows (in billions of dollars): households' spending on consumption firms spending on capital goods firms' additions to inventories govemment spending on services government spending on capital goods government transfers (e.g., Social Security) value of exports value of imports 100 15 O$143 billion O$135 billion O$123 billion $167 billion None of the other answers are correct. 1 10 2 20 7 12 [If the image above doesn't appear click here to open it in a new tab.] What is the correct estimate of GDP?arrow_forward
- The table below includes data for a one-year period required to calculate GDP from the income side for a teeny-tiny economy. Gross investment expenditure Wages and salaries Consumption expenditure Interest and investment income Business profits Depreciation Indirect taxes less subsidies Net exports TABLE 5-4 $402.00 $1741.00 $1711.60 $1811.40 $1910.80 $1840.40 O $2004.80 $1302.40 $99.40 $70.40 $199.20 $175.20 $94.00 Refer to Table 5-4. What is the value of net domestic income at factor cost?arrow_forwardADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption C= 60 + 08Y Assume further that planned investment lo government spending G, and net exports X are independent of the level of real GDP nd constant at lg 40, G= 0, and Xp= 10. Recall also that, in equilibrium, the real output produced () is equal to aggregate expenditures: Y= C+lg+ G+ Xp Instructions: Round your answers to the nearest whole number. a. Calculate the equilibrium level of income or real GDP for this economy S 1050 b. What happens to equilibrium Yif lg changes to 20? 950 What does this outcome reveal about the size of the multiplier? Multiplier=arrow_forwardRefer to Table 21.6. Personal consumption expenditures in billions of :dollars are Federal purchases of goods Services Imports Change in business inventories Durable goods Nondurable goods Exports Residential investment State and local purchases Nonresidential investment $Billions 1,400 700 500 100 400 600 300 300 600 700 1,100 O 1,000 O 1,300 O 1,700 Oarrow_forward
- 1. Aggregate expenditures and income The following table shows consumption (C), investment (1), government spending (G), and net exports (X-M) in a hypothetical economy for various levels of real GDP (Y). Assume that the price level remains unchanged at all levels of income. All figures are in billions of dollars. Compute aggregate expenditures for each income level and fill in the last column In the following table. Y с G 500 525 250 150 600 550 250 150 575 250 150 600 250 150 -200 900 625 250 150 -200 700 800 AL AGGREGATE EXPENDITURES (Billions of dollars) The following graph shows real GDP on the horizontal axis and aggregate expenditures (AE) on the vertical axis. The orange line (square symbols) represents a 45-degree (Y-AE) line. 1000 Use the blue points (circle symbol) to plot the aggregate expenditures line for this economy. Line segments will automatically connect the points. 900 300 I 700 X-M Aggregate Expenditures -200 725 -200 750 775 800 825 600 500 + -200 AE line *+…arrow_forwardHello! I need the correct answer for the question attached. Thank you!arrow_forwardTable 7-3 (in $ billion) consumption $1,100.00 %3D inventory investment = $460.00 purchased of new capital goods = $560.00 government purchases = $300.00 %3D exports = $20.00 %3D imports $33.00 %D purchased of new residential housing = $58.00 %3D Refer to Table 7-3, GDP equals O $2,165.00 O $2,432.00 O $2,465.00 O $2,425.00arrow_forward
- Item Personal consumption expenditure Government expenditure on goods and services Net taxes Gross private domestic investment Imports of goods and services Exports of goods and services Millions of dollars 80 30 35 20 10 20 Use the information in the table above to calculate the value of net exports. O $10 million $30 million $0 -$10 millionarrow_forwardAll values below are in trillions of dollars Household Consumption $11.9 State & Local Government Expenditures $1.46 Imports $2.04 Gross Private Investment $4.08 Federal Government Expenditures $2.80 Payments of Factor Income to Other Countries $3.21 Depreciation $0.99 Exports $1.57 Receipts of Factor Income from Other Countries $3.79 Using the expenditure approach, Gross Domestic Product (in billions of dollars) is $________ trillion.arrow_forwardWhich of the following description best explains the expenditures approach to calculating GDP? O consumer spending, private investment, government spending, exports minus imports O consumption, business purchase of raw material, government social security payments, and exports O investment, consumption, wages, and imports O savings, income, investment, and exportsarrow_forward
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc