Using the following national income accounting data compute

Using the following national income accounting data, compute GDP by both the expenditure and income approach [2 points each]. All figures are in billions.

Profits of corporations and government enterprise before taxes $46

Exports $94

Capital allowances $65

Government current purchases of goods and services $113

Net income of farm and unincorporated businesses $24

Taxes less subsidies on factors of production $75

Wages, salaries, supplementary labour income $371

Gross investment $167

Indirect taxes less subsidies on products $11

Interest and investment income $59

Personal consumption expenditure $284 Imports $7

Solution

Expenditure Method =

113(Government current purchases of goods and services)

+ 167(Gross investment)

+ 284(Personal consumption expenditure)

+ 94(Exports)

- 7(Imports)

= $651

Income Method =

46(Profits of corporations and government enterprise before taxes)

+ 24(Net income of farm and unincorporated businesses)

+ 371(Wages, salaries, supplementary labour income)

+ 59(Interest and investment income)

+ 65(Capital allowances)

+ 11(Indirect taxes less subsidies on products)

+ 75(Taxes less subsidies on factors of production)

=$651