Answer the following questions on the basis of the following hypothetical nation
ID: 1094894 • Letter: A
Question
Answer the following questions on the basis of the following hypothetical national income data.
Interest paid by consumers------------------------------------- $ 15
Government purchases of goods & services--------------- 400
Social Security taxes---------------------------------------------- 135
Personal taxes------------------------------------------------------ 320
Corporate income taxes----------------------------------------- 20
Indirect business taxes------------------------------------------- 50
Transfer payments------------------------------------------------ 160
U.S. exports--------------------------------------------------------- 35
Gross private domestic investment--------------------------- 180
Personal consumption expenditures-------------------------- 600
U.S. imports-------------------------------------------------------- 45
Undistributed corporate profits------------------------------- 15
Depreciation-------------------------------------------------------- 60
Gross Domestic Product is:
Net Domestic Product is:
National income is:
Personal Income is:
Disposable Income is:
Saving is:
Explanation / Answer
1)Y (GDP) = C (Consumer Spending) + I (Consumer Investment) + G (Government Purchases) + NX (Net Exports)
Y = 600 + 180 + 400 + (35 - 45)
Y = 1180 + (-10)
Y =$ 1170
The gross domestic product based on the above hypothetical national income data is $1170.
2)Net Domestic Product is:
NDP = GDP - Depreciation
NDP = 1170 - 60
NDP =$ 1110
The net domestic product based on the above hypothetical national income data is $1110.
3)National income is:
NI = GDP - Depreciation - Indirect business taxes
NI = 1170 - 60 - 50
NI = $1060
The national income based on the above hypothetical national income data is $1060.
4)Personal Income is:
PI = NI + Interest paid + Transfer payments
PI = 1060 + 15 + 160
PI = $ 1235
The personal income based on the above hypothetical national income data is $1235.
5) Disposable Income is:
DI = PI - personal taxes
DI = 1235 - 320
DI= $ 915
The disposable income is $ 915.
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