From the data given below, calculate GDP and consumption of fixed capital. Define GDP. Gross Investment $18 National Income 100 Net Exports Personal Income 2 85 Personal Consumption Expenditures Saving Government Purchases Net Domestic Product Statistical Discrepancy 70 20 105
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- Cross country comparisons of GDP per capita typically use purchasing power parity equivalent exchange rates, which are a measure of the long run equilibrium value of an exchange rate. In fact, we used PPP equivalent exchange rates in this module. Why could using market exchange rates, which sometimes change dramatically in a short period of time, be misleading?Would you usually expect GDP as measured by what is demanded to be greater than GDP measured by what is supplied, or the reverse?The following figures are from data on Good Island Economy Items $m Net private investment 940 Depreciation 56 Compensation of employees 2 256 Corporate taxes 416 Personal taxes 756 Personal Consumption expenditure 4 386 Government purchases 3 182 Indirect business taxes minus subsidies 482 Payment of factor income to the rest of the world 95 Corporate profits minus dividends 56 Government transfer payments and interest 243 Exports 855 Receipts of factor income from abroad 186 Imports of goods and services 385 Social insurance payments 332 Required: Use the above information to answer the following i.) Calculate for Good Island: Gross private investment Gross Domestic product Gross National Product Net National Product National income Personal Income Disposable Personal Income
- Determine the Gross Domestic Product GDP using the two approaches: Income Approach ( consider the following hypothetical data ) Billion of Pesos Salaries Php 200 Wages 50 Rentals 80 Interests 30 Profit by businessmen 100 Earnings of entrepreneur 60 Expenditure Approach ( consider the following data. ) Billion of Pesos Personal consumption expenditures Php 100 Personal taxes 40 Exports 50 Depreciation 10 Government purchases 60 Gross private domestic investment 40 Imports 45 Government transfer payments 20 Question: 1. What is the amount of GDP obtained? What is the value of net exports? 2. What is the value of net investment? What is the value of net domestic product?The table given below reports the value of different economic variables of a country during a year.Table 5.4 GNP Data(Adjusted for net factor income from abroad) Net Investment $400 Capital Consumption Allowance $800 Indirect Business Taxes $600 U.S. Exports $200 U.S. Imports $300 Government Purchases $150 Consumption Spending $2,030 Refer to Table 5.4. What will be the value of gross investment? Group of answer choices $1,000 $1,200 $400 $1,800 IndeterminateShow all the necessary steps that lead to your answer. 1. Consumption $6000 (in billion) Gross Investment 1500 Indirect business taxes 300 Retained earning 244 Corporate taxes 200 Social securities taxes 900 Government purchases 1500 Export 500 Transfer payments 1000 Net interest 500 Net foreign factor income 4 Depreciation 800 Capital consumption allowance Import 100 Personal income tax 300 a. Calculate GDP from the above figures b. Calculate national income from the above figures c. Calculate personal income from the above figures d. Calculate disposable income from the above figures
- Question 2 - Computation and Short AnswerStudents are required to show ALL workings to be awarded the full marks for eachpart of this question.(a) Calculate GDP using the Income and Expenditure Approach. (all figures are in billions of dollars):Item Amount ($)Government purchase of goods and services 1,721.6Exports 1,096.3Receipts of factor income from the rest of the world 382.7Depreciation (consumption of fixed capital) 990.8Net fixed Investments 688.2Corporate income taxes 265.2Consumption expenditures 6,739.4Indirect business taxes 664.6Imports 1,475.8Payments of factor income to the rest of the world 343.7Inventory change 56.5Social security contributions 702.7Undistributed corporate profits (retained earnings) 130.3Government transfer and interest payments 1,366.3Personal interest payments 286.2Personal taxes 1,235.7You are given the following information about an economy : Gross private domestic investment =. 40Government purchase of goods and Services. =. 30 Gross national product ( GNP). =. 200Current account balance. =. -20 Taxes. =. 60Government transfer payment to thedomestic private sector. =. 25Interest payment from the governmentto the domestic private sector. =. 15Factor income received from rest of world. =. 7Factor payment made to rest of world. =. 9 Find the following, assuming that government investment is zero. : a) consumptionb) Net exportc) GDPd) net factor payment from abroade) private savingf) government savingg) national savingSuppose the data BELOW is for a given year from the annual Economic Report of the President. Calculate GDP using the expenditure approach (Amount in billions of dollars): Corporate profits: $ 305Depreciation: $ 479Gross private domestic investment: $716Personal taxes: $ 565Personal saving: $120Government spending: 924Imports: $ 547Exports: $ 427Personal consumption expenditures: $ 2,966Indirect business taxes: $ 370Contributions for Social Security (FICA): $ 394Transfer payments and other income: $ 967
- Using the following national income accounting data, compute (a) GDP, (b) NDP, and (c) NI. All figures are in billions. Category Billions Compensation of employees $226.2 U.S. exports of goods and services 19.8 Consumption of fixed capital 11.8 Government purchases 59.4 Taxes on production and imports 14.4 Net private domestic investment 52.1 Transfer payments 13.9 U.S. imports of goods and services 16.5 Personal taxes 40.5 Net foreign factor income 2.2 Personal consumption expenditures 249.1 Statistical discrepancy 0.0 Instructions: Round your answers to 1 decimal place. a. GDP = $ billion b. NDP = $ billion c. NI= $ billionYou are given the following information about an economy GDP at Market Prices 1,,669.4Imports 290.5Gross Domestic Capital Formation 48.7Income accruing to the Public Sector 39.0Retained Business Earnings 75.9Exports 273.4Subsidies 16.8Factor Payments from Abroad 10.0Capital Consumption Allowance 10.5Income Payments to Foreigners 19.2Direct Taxes 355.6Public Sector Consumption Expenditure 490.1Indirect Taxes 297.3Transfer Payments 25.7 Derive the following: (i) Disposable Income (2) Household Consumption ExpenditureYou are given the following information about an economy GDP at Market Prices 1,,669.4Imports 290.5Gross Domestic Capital Formation 48.7Income accruing to the Public Sector 39.0Retained Business Earnings 75.9Exports 273.4Subsidies 16.8Factor Payments from Abroad 10.0Capital Consumption Allowance 10.5Income Payments to Foreigners 19.2Direct Taxes 355.6Public Sector Consumption Expenditure 490.1Indirect Taxes 297.3Transfer Payments 25.7 Derive the following:(i) National Income (ii) Net Investment (iii) Personal Income (iv) Disposable Income (v) Household Consumption Expenditure