Question

Suppose net domestic product $4.8 billion, net income earned abroad is $0.7 billion, other business income adjustment net of indirect business taxes and transfers are $0.4 billion and personal income taxes are 0.8 billion.

Then, national income equals.

a. $6.7 billion

b. $5.9 billion

c. $2.9 billion

d. $3.6 billion

Answer 1

To compute the national income, we add the net domestic product, net income earned abroad, and other business income adjustments. In this case, the calculation gives us a national income of $5.9 billion, which corresponds to option b.

Step-by-step explanation:

To calculate the national income, we need to consider the net domestic product (NDP), net income earned abroad, other business income adjustments, indirect business taxes, transfers, and personal income taxes. In the given scenario, the national income can be calculated as follows:

• Net Domestic Product (NDP): $4.8 billion
• Net Income Earned Abroad: $0.7 billion
• Other Adjustments (net of taxes and transfers): $0.4 billion

Adding these three components together, we get:

$4.8 billion + $0.7 billion + $0.4 billion = $5.9 billion

Therefore, the correct answer is option b, $5.9 billion.