Question

Using the following national income accounting data, compute GDP, NDP, and NI:

a. Gross Investment: $500 million
b. Government Purchases: $200 million
c. Depreciation: $100 million
d. Net Exports: $50 million

Answer 1

To calculate GDP, sum up consumption, investment, government spending, and net exports. NDP is found by subtracting depreciation from GDP. NI requires further information on taxes and subsidies, which are not provided.

Step-by-step explanation:

The task is to calculate Gross Domestic Product (GDP), Net Domestic Product (NDP), and National Income (NI) using the given national income accounting data. GDP is the total value of goods and services produced within a country's borders in a specific time period, typically a year. It is calculated using the formula GDP = C + I + G + (X - M), which stands for consumption, investment, government spending, and net exports (exports minus imports), respectively. In this case, we do not have the consumption amount, so we would need that information to compute GDP.

Nonetheless, once GDP is calculated, to find the NDP, we subtract depreciation from GDP: NDP = GDP - Depreciation. Finally, to get NI, we need to subtract indirect taxes and add subsidies to NDP; however, since no information is provided on taxes or subsidies, we can't calculate NI accurately without additional data.

Considering a hypothetical scenario where consumption is given, we would proceed as follows:

1. Add Gross Investment, Government Purchases, and Net Exports together.
2. Subtract Depreciation from the GDP to get NDP.
3. To find NI, adjust NDP by subtracting indirect taxes (not included in the data provided) and adding subsidies (also not included).

Answer 2

GDP is calculated as $750 million, NDP as $650 million, and NI is approximately $650 million using the provided national income accounting data.

Step-by-step explanation:

The student has provided national income accounting data and is seeking to compute GDP, NDP, and NI. Using the given data:

• Gross Investment: $500 million
• Government Purchases: $200 million
• Depreciation: $100 million
• Net Exports: $50 million

The formula for GDP (Gross Domestic Product) is:

GDP = Gross Investment + Government Purchases + Net Exports

Plugging in the values:

GDP = $500 million + $200 million + $50 million = $750 million

The Net Domestic Product (NDP) is calculated by subtracting depreciation from the GDP:

NDP = GDP - Depreciation = $750 million - $100 million = $650 million

National Income (NI) can be approximated as the NDP in the absence of specific data on taxes or other national income factors:

NI ≈ NDP = $650 million

To accurately calculate NI, further information such as taxes, subsidies, and income from abroad would be required.