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9. You have been hired as a research assistant and are given the following data about...

9. You have been hired as a research assistant and are given the following data about another economy

Corporate income tax $200

Profits $ 600

Rent $ 120

Depreciation $20

Indirect business taxes $110

Net foreign factor income $-5

Interest charged to borrowers $295

Social security contribution $30

Transfer payments $80

Wages $1100

Personal taxes $175

Calculate the GDP using the factor payment approach. Show work. ___________________

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Answer #2

GDP using Factor payment approach or income method: National income includes all the payments made to the factors of production like compensation of employees, operating surplus and mixed income and to compute GDP from national income add (indirect business tax+depreciation+Net factor income).

GDP= (Wages+Social security contribution)+(Rent+profit+corporate income tax)+indirect business tax+depreciation+Net factor income

GDP= 1100+30+120+600+200+110+20+(-5)= $2175

answered by: anonymous
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