Question

1) Compute GDP using the appropriate information below (all values are thousands).

Private Consumption 1,101,172
Exports 491,126
Private Fixed Investment 348,848
Imports 397,307
Public Spending 352,019
Taxes 300,234
Retail Sales 1,000,543


2) Compute National Income using the appropriate information below (all values are thousands).

Compensation of employees 10,407,900
Supplements to wages and salaries 1,953,400
Proprietors' income with inventory valuation and capital consumption adjustments 2,231,321
Corporate profits with inventory valuation and capital consumption adjustments 2,099,453

Answer 1

1)

GDP Using Expenditure method is given by:

GDP = Private Consumption expenditure + Private fixed Investment + Government (or public) sending + Exports - imports.

Hence In this case GDP = Private Consumption + Private Fixed Investment + Public Spending + Exports - Imports

= (1,101,172 + 348,848 + 352,019 + 491,126 - 397,307) thousand

= 1895858 thousand

2) National income using Income method is given by:

Y = compensation of employees + operating surplus + Mixed Income

Here operating surplus = Corporate profits with inventory valuation and capital consumption adjustments = 2,099,453 thousand

Mixed Income = Proprietors' income with inventory valuation and capital consumption adjustments

= 2,231,321 thousand

compensation of employees = 10,407,900 thousand

Hence National income (Y) = (10,407,900 + 2,231,321 + 2,099,453) thousand

= 14738674 thousand