Question

Use the following information to calculate GDP. You may calculate GDP from either the expenditure side or the income side of the accounts.
Government purchases of goods and services 3,200
Consumption 11,500
Compensation of employees 9,100
Business structures and equipment investment 1,500
Residential investment 500
R&D expenditures 200
Corporate profits 1,500
Rent 300
Interest 1,000
Proprietors income 200
Change in business inventories -100
Taxes on production and imports 2,000
Government transfer payments 1,800
Exports 1,500
Imports 2,000
Depreciation 2,000
Statistical discrepancy 200.
a. Calculate GDP
b. Calculate National Income.

Answer 1

Answer:

Explanation:

GDP formula :

GDP = consumption+ residential investment + change in business inventory+ business structure and equipment investment +government purchases of goods and services+ R$D expenditure+ export - import

Consumption 11,500

Residential investment 500

Change in business inventories -100

Business structures and equipment investment 1,500

Government purchases of goods and services 3,200

R&D expenditures 200

Corporate profits 1,500

Taxes on production and imports 2,000

GDP= 11500+500-100+1500+3200+200+1500-2000

= 16300

National income= GDP - depreciation

= 16300-2000

= 14300