The following table contains national income accounting data for a hypothetical economy:
$7,000 million
Personal income tax and nontax payments - $900 million
Government and business transfer payments - $1,500 million
Corporate taxes, Social Security contributions, and corporate retained earnings - $1,100 million
Indirect business taxes - $900 million
Depreciation - $1,000 million
Starting from the value for disposable personal income (DPI), gross domestic product is calculated to be $_____
(enter your response as an integer)
Personal income tax and nontax payments - $900 million
Government and business transfer payments - $1,500 million
Corporate taxes, Social Security contributions, and corporate retained earnings - $1,100 million
Indirect business taxes - $900 million
Depreciation - $1,000 million
Starting from the value for disposable personal income (DPI), gross domestic product is calculated to be $_____
(enter your response as an integer)
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5. The income approach The following table shows macroeconomic data for a hypothetical country. All figures are in billions of dollars.
National income can also be calculated based on disposable income. Use the following table to derive personal income and national income (in billions of dollars). Specify what needs to be added to disposable income to arrive at personal income, and explain how personal income should be adjusted to find national income.
National income is the total amount earned by the citizens of a country, while gross domestic product is the total value of goods and services produced within a country. To determine the gross domestic product, you have to make some adjustments to national income. Use the following table to derive gross domestic product and, as part of the process, net domestic product (NDP) (in billions of dollars). Again, specify what should be added to and subtracted from national income to arrive at the net domestic product, and what should be added to the net domestic product to arrive at the gross domestic product.
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