Question

GDP data (billions of dollars)

Personal consumption expenditures $4,750
Exports 810
Government spending 1,400
Social Security taxes 600
Depreciation 450
Indirect business taxes 550
Imports 850
Gross private domestic investment 900
Corporate income taxes 200
Personal taxes 800
Corporate profits 50
Transfer payments 700
Personal income (PI) is:____.
a. $9,210 billion.
b. $8,510 billion.
c. $6,560 billion.
d. $6,610 billion.
e. $10,910 billion.

Answer 1

d. $6,610 billion.

Step-by-step explanation:

Gross Domestic Product = C + I + G + X - M

Gross Domestic Product = Personal Consumption Expenditures + Gross Private Domestic Investment + Government Spending + Exports - Imports

Gross Domestic Product = $4,750 + $900 + $1,400 + $810 - $850

Gross Domestic Product = $7,010

Net Domestic Product = GDP - Depreciation

Net Domestic Product = $7,010 - $450

Net Domestic Product = $6,560

National Income = $6,560

Personal Income = National Income + Transfer Payments - Social Security Taxes - Corporate Profits

Personal Income = $6,560 + $700 - $600 - $50

Personal Income = $6,610 billion