Question

Using the following national income accounting data, compute (a) Gross Domestic Product in Income and expenditure...

Using the following national income accounting data, compute (a) Gross Domestic Product in Income and expenditure approach (b)
Net Domestic Product, (c) National Income, (d) Personal Income and (e) Disposable Income
Personal consumption expenditures $11,736
Compensation of employees $9,805
Gross private domestic investment $2,745
Rents $77
Government purchases $2,745
Interest $724
Net exports $810
Proprietors’ income $1,124
Corporate profits $2,048
Corporate income taxes $499
Taxes on production and imports $1,234
Net foreign factor income $111
Statistical discrepancy $45
Consumption of fixed capital $1,925
Social Security contributions $989
Undistributed corporate profits $356
Transfer payments $2,145

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Answer #1

a)GDP=personal consumption expenditures+gross private domestic investment+government purchase+Net exports=$11736+$2745+$2745+$810=$18,036

b)Netdomestic product=GDP-consumption of fixed capital=$18,036-$1925=$16111

c)Nationalincome=compensation of employees+rent+interest+proprietors income+corporateprofits+taxes on productionand imports=$9805+$77+$724+$1124+$2048+$1234=$15,372

d)Personal income=National income-taxes on production and imports-socialsecurity contribution-corporate income taxes-undistributed corporate profits+transferpayments

=$15372-$1234-$989-$499-$356+$2145=$14,439

e)Disposable income=personal income-personal taxes=14,439-0=$14,439

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