Final answer:
To compute GDP, NDP, and NI, you need to follow certain calculations. Personal savings can be calculated by subtracting consumption expenditure from disposable income. Disposable income is what remains after subtracting taxes from personal income. Gross investment is the total spending on new capital goods, while consumption expenditure is the total spending by households on goods and services.
Step-by-step explanation:
To compute GDP, we add up consumption expenditure (C), government spending on goods and services (G), business investment (I), and net exports (X - M). GDP = C + G + I + (X - M). To compute NDP, we subtract depreciation from GDP. NDP = GDP - Depreciation. To compute NI, we subtract indirect taxes (T) and add subsidies (S) to NDP. NI = NDP - (T - S).
A) Personal savings is the amount of money that households save from their income. It can be calculated by subtracting consumption expenditure (C) from disposable income (DI). Personal Savings = DI - C.
B) Disposable income is what remains after subtracting taxes (T) from personal income (PI). Disposable Income = PI - T.
C) Gross investment is the total spending on new capital goods (machinery, equipment, buildings). It can be calculated by adding business investment (I) and government investment (G). Gross Investment = I + G.
D) Consumption expenditure is the total spending by households on goods and services. It can be calculated by subtracting savings (S) and taxes (T) from disposable income (DI). Consumption Expenditure = DI - S - T.