The table to the right provides some national income figures for the country of
ID: 1216936 • Letter: T
Question
The table to the right provides some national income figures for the country of Econoland. All figures are in millions of dollars. Which row numbers are included in the calculation of GDP using the expenditure approach? The row numbers of are included in the calculation of GDP using the expenditure approach. Using the expenditure approach, how much is GDP? GDP is $ million. (Round your response to the nearest whole number.) Which row numbers are included in the calculation of GDP using the income approach? The row numbers of are included in the calculation of GDP using the income approach. Using the income approach, how much is GDP? GDP is $ million. (Round your response to the nearest whole number.) Which row numbers are included in the calculation of net domestic income at factor cost? The row numbers of are included in the calculation of net domestic income at factor cost. The value of net domestic income at factor cost is $ million. (Round your response to the nearest whole number.) Item Amount (in millions of dollars) Wages and salaries 25,000 Interest income 1,000 Personal consumption 19,500 Personal saving 150 Personal income taxes 200 Government purchases 5,000 Indirect taxes 875 Subsidies 150 Business profits 2,325 Exports 1,750 Net private investment 4,750 Imports 1,950 Depreciation 750Explanation / Answer
1) While calculating GDP by expenditure approach, four main factors are counted.
Y = C + G + I + NX
GDP = Private Consumption + Government Expenditure + Gross Investment + Net Exports
Line 3 + 4 + 6 + (11+13) + (10 - 12)
19500 + 150 + 5000 + (4750 + 750) + (1750 - 1950) = 29950
2) In the calculation od GDP by income approach following factors are taken into account
wages and salaries + interest + rent + corporate profits + indirect business taxes + depreciation + Net foreign factor income
Line 1+2+7+9+13
Y = 25000 + 1000 + 875 + 2325 + 750
Y = 29950
3) Net domestic income at factor cost
Wages + Corporate profits + Interest
Line 1 + 2 + 9
25000 + 1000 + 2325 = 28325
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