In a simple economy, suppose that all income is either compensation of employees or profits. Suppose also that there are no indirect taxes. Calculate gross domestic product from the following set of numbers. Show that the expenditure approach and the income approach add up to the same figure.

In a simple economy, suppose that all income is either compensation of employees or profits. Suppose also that there are no indirect taxes. Calculate gross domestic product from the following set of numbers. Show that the expenditure approach and the income approach add up to the same figure.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter12: Federal Budgets And Public Policy

Section: Chapter Questions

Problem 3.6P

See similar textbooks

Related questions

Q: Suppose a small economy has two income tax rates: 15% for all income up to $50,000 and 30% for any…

A: Given that, Income of Amy = $20,000Income of Betty = $40,000Income of Charlie = $60,000Income of…

Q: An Economy is composed of a Producer of Apples, a Producer of Bananas, a Grocery Store, Consumers,…

A: Total profits = Profits made by Apple producers + Profits made by banana producers + Profits made by…

Q: The product approach of national income accounting measures the income received by firm owners. the…

A: The value of products and services generated by a country throughout a financial year is referred to…

Q: Subpart #11 to be answered Suppose a small economy has two income tax rates: 15% for all…

A: Marginal Propensity to Save(MSP): MPS in Keynesian economic theory represents the proportion of an…

Q: social-distancing rules that brought the real estate market to a standstill. For instance, in…

A: Covid is a pandemic , which has adverse impact on every nation. Due to covid, there is recession in…

Q: Suppose a small economy has two income tax rates: 15% for all income up to $50,000 and 30% for any…

A: New incomes of ammy = 75% or 20,000 = 15,000 New incomes of…

Q: Differentiate between the income approach and expenditure approach to the measurement of national…

A: National income is the market value of all final goods and services produced in the economy in a…

Q: Suppose a small economy has two income tax rates: 15% for all income up to $50,000 and 30% for any…

A: National income implies the worth of labour and products created by a country during a monetary…

Q: Proprietors' income includes all of the following except Select one : a. the income of…

A: Sole proprietorship: one can operate this business.

Q: In national income accounting, government purchases include: purchases by the Federal government…

A: Government purchase includes government spending on goods and services, by federal, state and local…

Q: A farmer grows wheat, which she sells to a miller for $90. The miller turns the wheat into flour,…

A: A measure that tends to add up all of the money amounts in a given span of time which is being spent…

Q: Although the gross domestic product (GDP) has historically been the strongest indicator of national…

A: GDP refers to a country's overall financial performance over an arbitrary period of time. While GDP…

Q: Using the following national income accounting data, compute (a) GDP, (b) NDP, and () NI. All…

A: GDP is a macroeconomic measure used in the computation of the aggregate total output produced in an…

Q: Suppose the government's national income and product accounts revealed the following information:

A: The total amount of income coming to a country from economic activities over the course of a year is…

Q: Which of the following are counted in this year's GDP explain your answer in each case a flashy car…

A: The gross domestic product of an economy is the aggregate value of all the final goods and services…

Q: An Economy is composed of a Producer of Apples, a Producer of Bananas, a Grocery Store, Consumers,…

A: We use the expenditure method to calculate GDP. GDP = Consumption expenditure + Investment…

Q: Find a) Personal disposable income b) Personal income in the following question: Corporate tax 120…

A: Personal income is the total households income, which excludes the government income and corporate…

Q: If households pay $1,000 in interest payments and receive $1,200 in interest, wages equal $9,000,…

A: The gross domestic income measures the economic activity of a country by summing up the income…

Q: consider the following hypothetical economy. Consumption makes of 60% of national income,…

A: Given consumption is 60% of national income implies that C=0.6Y, where C is consumption and Y is…

Q: For each of the following transactions, determine if it takes place in the market for outputs or the…

A: The measure that depicts the market value of all the goods and services being produced in an economy…

Q: What are the major forms of household income? Contrast the wage and salary share to the profit share…

A: The household income refers to the income which is generated by the people after they work and all…

Q: Suppose a small economy has two income tax rates: 15% for all income up to $50,000 and 30% for any…

A: GDP computes the monetary value of final goods and services—that is, those that are purchased by the…

Q: What relevant aspects of the economy are not reflected in the national income accounting system?

A: National income accounting is a record-keeping system that records the economic activities of a…

Q: Are these purchases included in the calculation of gross domestic product? Explain your answer.

A: GDP includes market value of all final goods and services produced in an economy in a particular…

Q: of

A: We know that equilibrium requires: Y = AE = C + I + G C = (1 - MPS)(Y - T) and I = (MPS)(Y-T) So, Y…

Q: What is usually the smallest component of spending in GDP in Australia? A) Consumption spending…

A: GDP( Gross Domestic Product) GDP refers to the production level of an economy of a nation during a…

Q: What is Gross Domestic Product? What is included in this statistic? What is excluded?

A: (Q)What is Gross Domestic Product? What is included in this statistic? What is excluded?

Q: Suppose a small economy has two income tax rates: 15% for all income up to $50,000 and 30% for any…

A: GDP measures the total monetary worth of all recently created final products and services generated…

Q: be included in the calculation of national income?

A: National income can be defined as the value of all the goods and services produced by a country in a…

Q: Which of the following is included in the computation of Gross Domestic Product (GPD)? A. Govemment…

A: GDP is the market-value of all the final goods and services(G&S) produced within the…

Q: Rewrite the National Income model from the following equations and find the coefficient matrix if…

A: Y = C + I +G Y - C = I+G C= Y-I-G C = 25 + 6Y0.5

Q: Refer to the accompanying national Income data for the economy. All figures are in billions of…

A: Gross Domestic Product is defined as the final value of all goods and services produced in an…

Q: Intermediate goods and services are one of the largest components of the expenditure approach to…

A: GDP refers to goods and services produced in the economy. The more the goods and services are…

Q: What percentage of the U.S. gross domestic product (GDP) consists of consumer or household purchases…

A: (D)

Q: The following table shows the national income data for an economy in year 2020. ITEMS RM (Million)…

A: The measure that depicts the final value of goods and services produced in an economy during a given…

Q: indirect business taxes and capital consumption allowance are not income, yet they are included in…

A: Tax is one of the biggest sources for government revenue through which government meets its…

Q: Suppose a small economy has two income tax rates: 15% for all income up to $50,000 and 30% for any…

A: 1. (a) Income of Amy = $20,000 Tax paid by Amy = 15% of 20,000 = (15/100) *…

Q: Suppose the economy of Sugarland produces 3 pizzas at $5 a pizza, 6 gallons of ice cream at $3 a…

A: Q) increase in GDP but need not increase in economic well being this is the reason why GDP is not…

Q: Suppose a small economy has two income tax rates: 15% for all income up to $50,000 and 30% for any…

A: Tax revenue means the income earned through taxation by the government.

Q: A farmer grows wheat, which she sells to a miller for $90. The miller turns the wheat into flour,…

A: Answer is given below

Q: The gross domestic product (GDP) of the United States is defined as the all in a given period of…

A: Gross domestic product measures the value of goods and services that are produced in a given year…

Q: Suppose a small economy has two income tax rates: 15% for all income up to $50,000 and 30% for any…

A: The majority of the government's usual revenue comes from taxes. Taxes, which are imposed on people…

Q: Use the information in the table below to answer: GDP at market prices R397bn Net primary income…

A: Net national income at factor cost can be calculated by using the following formula.

Q: with the aid of a diagram, explain the income and expenditure model

A: The income and expenditure model is a Keynesian cross model that shows the equilibrium condition of…

Q: Why are there two measures of GDP, how is the income measure different from the expenditure measure,…

A: The 2008 System of National Accounts is used to compile data in all OECD member countries (SNA). The…

Q: GDP at market prices R397bn Net primary income payments to the rest of the world R37bn Indirect…

A: Given, GDP at market prices is R 397bn Net Primary income from ROW is R 37bn Indirect taxes is R…

Question

100%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Gross Domestic Product

VIEW

Expenditure and income method

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

One day, Barry the Barber, Inc., collects $400 forhaircuts. Over this day, his equipment depreciates invalue by $50. Of the remaining $350, Barry sends $30to the government in sales taxes, takes home $220 inwages, and retains $100 in his business to add newequipment in the future. From the $220 that Barrytakes home, he pays $70 in income taxes. Based onthis information, compute Barry’s contribution to thefollowing measures of income.a. gross domestic productb. net national productc. national incomed. personal incomee. disposable personal income
Y S G X-IM 935 -250 320 40 70 2,100 320 140 40 3,220 250 320 200 -150 4,800 375 320 240 -185 5,320 650 320 320 - 340 6,300 825 320 340 -340 Assume taxes are equal to zero. What is the equilibrium level C for the above economy? 4,425 4,800. 5,175. 4,010.
Use the 2019 U.S. federal tax rates in the table to calculate answers to the questions below. Give all answers to two decimals. V Taxable Income $0-$9,700 $9,701-$39,475 $39,476-$84,200 $84,201-160,725 $160,726-$204,100 $204,101-$510,300 Over $510,300 1st attempt Tax rate 10% 222335 12 24 37 See Hin
Net taxes are taxes paid minus O A. subsidies O B. consumption expenditure of households O C. capital expenditure D. cash benefits received from governments
9.which flows represent taxes? a. C and D b. E and F c. A and B d. D and E
Matchthe tax example Mth the tax structure Rat Tax on state Residents State haat ee Ta TPC %3D %3D %3D MEDICARE TAX 1.45% ($) 1.45% Fodoral Income Tax Tax Year 202O Schedule and Rates TPC M d e anle a Ha Chem SUN e A Real-World Example Pn ang Other Things to Consider E Progrossivo 1 Regressivo I Proportional
Assume for the following scenario that there is a 10% sales tax on gasoline. Gasoline Expenditures Total Tax Due Name (Dollars) (Dollars) Determine the amount of money each individual in the following table spends on gasoline taxes and their average tax rate. Total Taxable Income Average Tax Rate (Percent) (Dollars) Tim 10,000 10,000 Brian 40,000 32,000 Crystal 55,000 38,500 Hilary 85,000 51,000 Given the information in the previous table, sales tax on gasoline is because the average tax rate as income rises.
Goverment spending Social Security contributions Corporate taxes Personal income taxes Rent Wages 231 Consumption expenditures 250 Gross Private Domestic Investment 40 Select one: 50 20 5 8 54 OA. 228. B. 155. 301. 84. Using the above table, the Personal Income (Pl) for the country is O C. D. Profit Indirect business taxes Imports Exports Interest Depreciation Gove mment transfer payments 8953565 28 10 10
58 minutes ago Detions V ot we ep M. ABDEL RAHM.. MMED Heba Mamdouh FFARAH ORAS MARIAM HANY A MERUM YASSER Question 2: MCQ Which of the following would be included in the gross domestic Sroduct of Braza A the profits earned by a U. S owned plant in Brazil Bithe profits earned by a Brazilian coffee company operating in the United States the profits earned by a Brazilian colfee company operating in Peru D the profits earned by U. S suppliers to Brazil operating in the Unite States Bị the profits carned by Peruvian companies operating outside Brazil Paricloants howe Chal Reactana
Melodie’s taxable income is $38,000 and she pays income tax of $4,370. If Melodie’s taxable income increases to $40,000, she would pay income taxes of $4,740. What is Melodie’s marginal tax rate? a. 14.66% b. 22.00% c. 18.50% d. 12.00% e. Some other amount
Suppose an individual decreases their consumption in a year, resulting in more saving for and consumption in the next year. In a taxation system that taxes consumption but not interest income, what will happen to this individual's present value ilfetime tax burden? Ot will Increase. It will decrease. OIt will stay the same.
Complete the following table and answer one question. a. Assuming an 8 percent sales tax is levied on all consumption, complete the following table: Instructions: Round your responses for "Sales Tax" to the nearest whole number. Round your responses for "Percentage of Income Paid in Taxes" to one decimal place. Income Consumption $10,000 20,000 40,000 80,000 Sales Tax $11,000 $ 20,000 $ 1,400 36,000 $ 2,520 60,000 $ 4,200 x 770x Percentage of Income Paid in Taxes 7.7% 7.0% 6.3% X 5.3%