Worksheet: Calculating GDP S Billions Government Purchases Net Investment Intere

Question

Worksheet: Calculating GDP S Billions Government Purchases Net Investment Interest Earned by Firms Personal Income Taxes Net Exports Social Security Contribution Imports Personal Consumption .Transfer Payments .Gross Investment Personal Income Depreciation Indirect Business Taxes .Corporate Income Taxes Factor Income Receipts from Rest of World Factor Income Payments to Rest of World $ 4200 900 1400 3300 -1200 1400 3100 9100 1900 2800 10100 1800 450 800 700 650 Q: WHICH ACCOUNTING METHOD DO I USE? 1. GDP is: 2. NDP is: 3. Exports: 4. National (Household) Income is: 5. GNP is:

Explanation / Answer

Expenditure method

1) GDP at mp = C + I + G + NX

= 9100+2800+4200+[-1200]

= 14900

2) NDP = GDP - depreciation  

= 14900 - 1800

= 13100

3) we have NX = - 1200

NX = X - M

= X - 3100

- 1200 = X - 3100

X = 1900

4) national income = GDPMP - Depreciation + NFIA - NIT

NFIA = Net factor income from rest of world = 700 - 650

= 50

so national income = 14900 - 1800+ 50 - 450

= 12700

GNPMP = GDPMP + NFIA

= 14900+50

= 14950

GNPFC  = National income + Depreciation

= 12700 + 1800

= 14500

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