Question

You are given the following data: GDP                                    &

You are given the following data:

GDP                                                                2300

Depreciation                                                    250

Before tax corporate profit                              500

Social security contribution                             350

Transfers to households and firms                  500

Net interest to foreigners                                 100

Proprietary income                                              35

Net corporate saving                                       300

Indirect taxes                                                   500

Subsidies to enterprises                                   200

Fines and fees                                                     50

Net remittances to the rest of the world           250

Corporate taxes                                                   50

Consolidated government deficit                         50

Personal taxes                                                 750

Household savings                                          100

Investment expenditures                                  600

Compute: NDP, national income, personal income, personal disposable income, consumption, government purchases, GDP, the current account balance.

◆NDP = GDP - Depreciation = 2300-250 = 2050

◆ NNI = NDP - indirect taxes + subsidy = 2050 - 500 +200 = 1750

◆ Personal income = NNI - cooperate taxes - cooperate profit - net interest to foreigners - social security contribution - transfers to household and firms + net cooperate saving + net remittance to the rest of the world

= 1750 - 50-500-100-350-500+300 -350

= 900

◆ personal disposable income= PI - personal taxes =900 - 750 = 150

◆ GDP = 2300

◆ Current account balance = savings - investment = 100-600 = -500

◆ consumption = 100