Sub part (a):
Calculation of GDP and NDP.
Sub part (a):
Explanation of Solution
GDP income approach can be calculated as follows.
The value of GDP from expenditure approach is $388.
GDP expenditure approach can be calculated as follows
The value of GDP from income approach is $388.
Net domestic product can be calculated as follows.
The value of net domestic product is $361.
Concept introduction:
Gross Domestic Product (GDP): It is the worth of final goods and services produced in an economy within a particular time framework.
Net Domestic Product (NDP): It is the aggregate money value of all final commodities and services produced in the country in a given time period, minus net depreciation.
Sub part (b):
Calculation of national income .
Sub part (b):
Explanation of Solution
National income from NDP can be calculated as follows.
National income is $357.
National income from income and tax can be calculated as follows.
National income is $357.
Concept introduction:
Gross Domestic Product (GDP): It is the worth of final goods and services produced in an economy within a particular time framework.
Net Domestic Product (NDP): It is the aggregate money value of all final commodities and services produced in the country in a given time period, minus net depreciation.
Sub part (c):
Calculation of personal income.
Sub part (c):
Explanation of Solution
Personal income can be calculated as follows.
Personal income is $291.
Sub part (d):
Calculation of disposable income.
Sub part (d):
Explanation of Solution
Disposable income can be calculated as follows.
Disposable income is $265.
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Chapter 27 Solutions
Economics (Irwin Economics)
- Data for 2019 Item Price Quantity Market Value Tables $100 10 $1,000 Chairs $25 100 $2,500 Nominal GDP $3,500 Data for 2020 Item Price Quantity Market Value Tables $110 15 $1,650 $3,600 $5,250 Chairs $30 |120 Nominal GDP Using the data above, what is real GDP for 2020 assuming 2019 is the reference base year? $5,100 $5,250 O $4,500 O $3,500 Cannot determine from the information abovearrow_forwardNational Income 100 200 300 400 500 600 O 104 324 O374 This is a table for Keynesian cross diagram. 540 After-tax income Consumption 104 I+G+X below gives the data necessary to make a Keynesian cross diagram. Assume that the tax rate is 0.4 of national income, the MPC out of after-tax income is 0.9, investment is 58, government spending is 60, exports are 40, and imports are 0.1 of after-tax income. What does consumption equal when income equals 600? Minus Imports Aggregate Expenditures The chartarrow_forwardRefer to the table. Equilibrium GDP is: Government Purchases Consumption (after taxes) $-20 Gross Investment Net Exports Real GDP $15 $10 10 $+5 $0 0. +5 15 10 20 10 +5 15 40 40 10 +5 15 70 60 10 +5 15 100 80 10 +5 15 130 100 10 +5 15 160 $40. O $70. O $100. O $130. $160 O O O O Oarrow_forward
- Government purchases 30 Consumption 100 Investment spending Exports Imports Wages Interest billions of dollars ($) O $370 billion. 50 O $160 billion. O $130 billion. $310 billion. 40 Government purchases 60 20 190 130 According to the information in table, GDP =arrow_forwardRefer to the table given. Assume that this economy produces only two goods Good X and Good Y. The value for this economy's nominal GDP in year 3 is TL. Production (units) Prices (TL) Year 1 Year 2 Year 3 Year 1 Year 2 Year 3 Good X 60 80 100 1.00 1.00 1.40 Good Y 100 110 130 0.80 0.90 1.00 O 270 222 O 204 250arrow_forwardStill with the same data on Macroland, a closed economy with no government sector, and with fixed price level and interest rate. Fill-in the blank in the following table, then answer the following question. GDP Yd Iplanned lunplanned 20 22 30 50 30 80 30 100 70 30 The Macroland's government reduced its taxes by 20, the income- expenditure equilibrium is expected to be: O 50 O 80 O 100 O 150arrow_forward
- billions of dollars Personal consumption expenditures 500 Gross private domestic investment 400 Social Security payments to households 60 Federal government purchases of goods and services 100 State and local government purchases of goods 200 Imports 180 Net exports |-50arrow_forwardA country's GDP is being measured by the expenditure method. Various categories of expenditure are recorded as follows (in billions of dollars): households' spending on consumption firms spending on capital goods firms' additions to inventories govemment spending on services government spending on capital goods government transfers (e.g., Social Security) value of exports value of imports 100 15 O$143 billion O$135 billion O$123 billion $167 billion None of the other answers are correct. 1 10 2 20 7 12 [If the image above doesn't appear click here to open it in a new tab.] What is the correct estimate of GDP?arrow_forwardIn a small economy, consumption spending is $7,500, government purchases are $2,200, gross investment is $500, exports are $2,100, and imports are $3,000. What is gross domestic product? $9,300 O $15,300 O $11,100 O $12,300arrow_forward
- The table below includes data for a one-year period required to calculate GDP from the income side for a teeny-tiny economy. Gross investment expenditure Wages and salaries Consumption expenditure Interest and investment income Business profits Depreciation Indirect taxes less subsidies Net exports TABLE 5-4 $402.00 $1741.00 $1711.60 $1811.40 $1910.80 $1840.40 O $2004.80 $1302.40 $99.40 $70.40 $199.20 $175.20 $94.00 Refer to Table 5-4. What is the value of net domestic income at factor cost?arrow_forwardADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption C= 60 + 08Y Assume further that planned investment lo government spending G, and net exports X are independent of the level of real GDP nd constant at lg 40, G= 0, and Xp= 10. Recall also that, in equilibrium, the real output produced () is equal to aggregate expenditures: Y= C+lg+ G+ Xp Instructions: Round your answers to the nearest whole number. a. Calculate the equilibrium level of income or real GDP for this economy S 1050 b. What happens to equilibrium Yif lg changes to 20? 950 What does this outcome reveal about the size of the multiplier? Multiplier=arrow_forwardConsider a closed economy (no trade) where: C = 400+0.8YD lo = 1600 Go = 2200 NT = 0.2Y a. Calculate Y*. b. If Yp=10,000, is there an inflationary or recessionary gap? c. Calculate the change in government expenditure (G) necessary to move the economy back to its potential.arrow_forward
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc