The following is a list of figures for a given year in billions of dollars. Using this data, compute: (a) GDP; (b) NDP; (c) NI; (d) PI; (e) DI; (f) Net exports.
(Billions of dollars)
Transfer payments: $ 16
Government purchases: 80
Personal taxes: 38
Corporate income taxes: 28
Taxes on production and imports: 15
Social Security contributions: 8
Undistributed corporate profits: 19
Proprietors’ income: 25
Compensation of employees: 258
Personal consumption expenditures: 322
Consumption of fixed capital: 4
Rents: 10
U.S. Exports: 14
Corporate profits: 70
Interest: 12
Dividends: 23
Imports to U.S.: 17
Gross private domestic investment: 63
Net foreign factor income: 10
Statistical discrepancy: 35
(a) GDP = Personal consumption expenditures + Gross private domestic investment + Government purchases + Net exports
= 322 + 63 + 80 + (14 - 17)
= 462
(b) NDP = GDP - Consumption of fixed capital
= 462 - 4
= 458
(c) NI = NDP + Net foreign factor income
= 458 + 10
= 468
(d) PI = NI - Corporate income taxes - Taxes on production and imports - Social Security contributions - Undistributed corporate profits
= 468 - 28 - 15 - 8 - 19
= 398
(e) DI = PI - Personal taxes - Rents
= 398 - 38 - 10
= 350
(f) Net exports = Exports - Imports
= 14 - 17
= -3