Question

National Income Accounts (dollar figures are in billions) Expenditures for consumer goods and services $4,565 Exports...

National Income Accounts (dollar figures are in billions)

Expenditures for consumer goods and services $4,565
Exports $740
Government purchases of goods and services $1,465
Social Security taxes $510
Net investment $225
Indirect business taxes $520
Imports $825
Gross investment $865
Corporate income taxes $185
Personal income taxes $750
Corporate retained earnings $45
Net foreign factor income $20
Government transfer payments to households $690
Net interest payments to households $0

On the basis of Table 5.1, gross domestic product is

Multiple Choice

  • $7,635 billion.

  • $6,810 billion.

  • $6,980 billion.

  • $7,720 billion.

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Homework Answers

Answer #1

We can find GDP by two method

By Expenditure method and by Income approach method.

We use in expenditure method.

In this

C mean consumtion of good and services. (4565)

I mean gross domestic private investment. (865)

G mean government spendings like purchases. (1465)

X mean export. (825)

M mean import. (740)

we see for the GDP calculation we have to calculate all gross payment and expenditure.

So we apply this formula and find Gross Dometic product.

So our GDP is $6810 Billion's. option 2 is right.

Net investment mean after the depreciation from gross investment.

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