Question

Personal Consumption Expenditures	$10,001.30
Corporate Profits	1,066.60
Gross Private Domestic Investment	1,589.20
Indirect Business Taxes	1,001.10
Government Expenditures	2,914.90
Net Foreign Factor Income	146.20
Net Exports	-386.40
Wages	7,954.70
Proprietor's Income	1,030.70
Rental Income	292.70
Interest Income	765.90

GDP and National Income using the actual 2009 data from the table above will be

(a) $14,119 and $11,110.6

(b) $11,110.6 and $14,119

(c) $12,119 and $10,111.6

(d) None of the above.

Pl be detailed and solve step by step

Answer 1

For GDP,

Here we need to take expenditure approach,

Y = C + I + G + NX

Where , Y = GDP

C = consumption

I = investment

G=government spending

NX = (exports -imports) , net exports

= $10,001.30 + $1589.20 + $2914.90 -386.40

= $14119

For National Income,

National Income = Compensation to Employees (Wages) + Rents + Interest + Proprietor’s Income + Corporate Profits

= $7954.70 +$292.70+$765.90+$1030.70+$1066.60

= $11,110.60

correct answer is option (a)