Question

The table below shows the data for the country of Magnolia. Complete the national income accounting...

The table below shows the data for the country of Magnolia. Complete the national income accounting framework by filling in the missing data.

Expenditures Incomes
Consumption Compensation of employees 820
Gross investment 360 Gross operating surplus 360
Government spending 390 Gross mixed income
Net exports -30 Taxes less subsidies on production 70
Indirect taxes (net of subsidies) 150
Gross domestic product at market prices Gross domestic income at market prices
Less depreciation Less depreciation 110
Less indirect taxes (net of subsidies) Less indirect taxes (net of subsidies)
Net domestic product at basic prices Net domestic income at basic prices
+/- net foreign factor income +/- net foreign factor income -10
Net national product at basic prices (Net) national income
Add transfer payments 210
Less undistributed profit 50
Less corporate profit tax 150
Less other income items 60
Personal income 1300
Less personal income taxes 260
Disposable income
Savings 140
Consumption
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Answer #1

NDP at basic prices=GDP at market prices-Depreciation-Net indirect taxes=1620-110-150=1360.

NNP at basic prices=NDP at basic prices+Net foreign factor income=1360+(-10)=1350=(Net) National income using Income method.

Now Gross domestic income at market prices=1620=Value added+Net indirect taxes=Value added+150.

So, Value added=1620-150=1470.

Value added=Compensation of employees+Gross operating surplus+Mixed income+Other taxes less subsidies on production.

1470=820+360+Mixed income+70

Mixed income=1470-70-820-360

Mixed income=220

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