Refer to the accompanying national income data (in billions of dollars). Which i

Question

Refer to the accompanying national income data (in billions of dollars). Which items need to be accounted for in going from national Income to GDP?

Multiple Choice

1, 12, and 13

2, 11, and 12

13 only

1 and 2

1 Consumption of Fixed Capital $438 2 Taxes on Production and Imports 326 3 Compensation of Employees 2,347 4 Rents 14 5 Interest 287 6 Proprietors' Income 242 7 Corporate Profits 297 8 Personal Consumption Expenditures 2,582 9 Gross Private Domestic Investment 669 10 Government Purchases 815 11 Net Exports -78 12 Net Foreign Factor Income 46 13 Statistical Discrepancy 50

Explanation / Answer

National income = NNP at FC

GDP = GDP at MP

So we want to calculate GDP at MP from the national income, then we should consider depreciation ( Consumption of Fixed Capital) and net factor income from abroad and statistical discrepancy.

NNP at FC + depreciation -net factor income from abroad = GDP at FC

The statistical discrepancy is calculated as gross domestic product less gross domestic income.

Hence option first is correct answer and it is 1, 12, and 13

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---