Homework SourseUsing the national income data in the table below to compute
Using the national income data in the table below to compute the following: 1. GDP 2. NDP 3. NI
| Nattional Income Accountingd Data | Amount |
| Compensation of employees | $288.2 |
| US exports of goods and services | 63.4 |
| Consumption of fixed capital | 23.6 |
| Government purchases | 188.8 |
| Taxes on production and imports | 28.8 |
| Net private domestic investments | 104.2 |
| Transfer payments | 27.8 |
| US imports of goods and services | 33.0 |
| Personal Taxes | 81 |
| Net foreign factor income | 4.4 |
| Personal consumption expenditures | 438.2 |
| Statistical discrepancy | 0 |
Solution
(a)
GDP = Personal consumption expenditure + Net private domestic investment + Government purchases + Exports of goods & services - Imports of goods & services
= 438.2 + 104.2 + 188.8 + 63.4 - 33
= 761.6 ($ billion)
(b)
NDP = GDP - Depreciation (Which is also known as Consumption of fixed capital)
= 761.6 - 23.6
= 738 ($ billion)
(c)
NI ($ billion) = NDP + Net foreign factor income (Factor income from abroad – factor income to abroad)
= 738 + 4.4
= 742.2 ($ billion)
