Question

Personal consumption expenditures $245 Net foreign factor income 4 Transfer payments 12 Rents 14 Consumption of...

Personal consumption expenditures

$245

Net foreign factor income

4

Transfer payments

12

Rents

14

Consumption of fixed capital (depreciation)

27

Statistical discrepancy

8

Social Security contributions

20

Interest

13

Proprietors’ income

33

Net exports

11

Dividends

16

Compensation of employees

223

Taxes on production and imports

18

Undistributed corporate profits

21

Personal taxes

26

Corporate income taxes

19

Corporate profits

56

Government purchases

72

Net private domestic investment

33

Personal saving

20

4. (Chapter 27) Use the attached National Income and Output Worksheet, and the national income data table on page 550 of your textbook (problem # 4) to compute the followings using both the Expenditure Approach and the Income Approach (be sure to fill in the values and show the calculations): (a) GDP, (b) NDP, (c) NI, (d); Adjust NI (from part c) as required to obtain PI; (e) Adjust PI (from part d) as required to obtain DI. Explain the followings NIPA concepts:

  1. GDP
  2. NDP
  3. NI
  4. PI
  5. DI
  6. Net Foreign Factor Income?

                                                                                                                                                                                                                                                                                                                       10pts.

National Income Accounting Worksheet

Measure

Value-Exp. Approach

Value-Income Approach

Gross Domestic Product (GDP)=

Components:

C (        )

+

Ig (       )

+                   

G (       )

+                   =

Xn (      )

=GDP=

Components:

Wages & Salaries (           )

+

Rents (            )

+

Interest (            )

+                                      

Proprietor’s Income (            )      

+

Corporate Profits   (               )

+

Taxes on Production and Imports

(              )

-Net Foreign Factor Income (          )

+ Statistical Discrepancy (            )

+Consumption of Fixed Capital

(                )

=GDP=

Net Domestic Product

(NDP)=

GDP (            )

-

Consumption of Fixed Capital (          )

=NDP=

GDP (           )

-

Consumption of Fixed Capital (          )

=NDP=

National Income (NI)=

NDP

-Statistical Discrepancy

(                )

+Net Foreign Factor Income

(                )

=NI=

Components:

Wages & Salaries

(           )

+

Rents (            )

+

Interest (            )

+                                     

Proprietor’s Income

(            )      

+

Corporate Profits

   (               )

+

Taxes on Production and Imports

(              )

=NI=

Personal Income (PI)=

National Income

-Taxes on production and Imports

(              )

-Social Security Contributions

(            )

-Corporate Income Tax

(               )

-Undistributed Corporate Profit

(              )

+ Transfer Payments

(                )

=PI=

National Income

-Taxes on production and Imports

(              )

-Social Security Contributions

(            )

-Corporate Income Tax

(               )

-Undistributed Corporate Profit

(              )

+ Transfer Payments

(                )

=PI=

Disposable Income (DI)=

PI

-Personal Taxes (               )

=DI=

PI

-Personal Taxes (               )

=DI=

                                                                  

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