Consumption=$9.9
Non-income-related taxes net of subsidies=0.8
Depreciation=1.2
Government spending=2.5
Imports=2.6
Gross private domestic investment=2.7
Exports=2.5
a. Based on the data above: (Enter your responses rounded to one decimal place.)
Calculate GDP? trillion.
Calculate NDP? trillion.
. Calculate NI?trillion.
.
GDP = Consumption + Gross private domestic investment + Government spending + Exports - Imports = $9.9 + $2.7 + $2.5 + $2.5 - $2.6 = $15 trillion
NDP = GDP - Depreciation = $15 - $1.2 = $13.8 trillion
NI = NDP - Non-income-related taxes net of subsidies = $13.8 - $0.8 = $13 trillion
b. Suppose that in 2024, exports fall to $2.3
trillion, imports rise to $2.8
trillion , and gross private domestic investment falls to $2.0
trillion. Calculate GDP in 2024, assuming that other values do not change between 2023 and 2024. ---trillion.
(Enter your response rounded to one decimal place.)
GDP = Consumption + Gross private domestic investment + Government spending + Exports - Imports
In 2024, Exports = $2.3 trillion, Imports = $2.8 trillion, Gross private domestic investment = $2.0 trillion
GDP = $9.9 + $2.0 + $2.5 + $2.3 - $2.8 = $13.9 trillion
Therefore, the GDP in 2024 would be $13.9 trillion.
To calculate the GDP, we need to use the expenditure approach, which is the sum of consumption (C), investment (I), government spending (G), and net exports (NX).
GDP = C + I + G + NX
Substituting in the given values:
GDP = $9.9 + $2.7 + $2.5 + ($2.5 - $2.6) = $9.9 + $2.7 + $2.5 - $0.1 = $15.0 trillion
To calculate NDP (Net Domestic Product), we need to subtract depreciation (D) from GDP.
NDP = GDP - D
NDP = $15.0 - $1.2 = $13.8 trillion
To calculate NI (Net Income), we need to subtract non-income-related taxes net of subsidies (NRT) from NDP.
NI = NDP - NRT
NI = $13.8 - $0.8 = $13.0 trillion
To calculate GDP (Gross Domestic Product), we can use the expenditure approach, which sums up all the components of spending in an economy. GDP is calculated by adding up Consumption (C), Government spending (G), Gross private domestic investment (I), and Net exports (X - M).
GDP = C + G + I + (X - M)
Given the data provided:
Consumption (C) = $9.9
Government spending (G) = $2.5
Gross private domestic investment (I) = $2.7
Exports (X) = $2.5
Imports (M) = $2.6
Now, let's calculate GDP:
GDP = $9.9 + $2.5 + $2.7 + ($2.5 - $2.6)
GDP = $9.9 + $2.5 + $2.7 + (-$0.1) = $15
Therefore, GDP is $15 trillion.
Next, let's calculate NDP (Net Domestic Product), which accounts for depreciation.
NDP = GDP - Depreciation
Given Depreciation is $1.2, we can calculate NDP as:
NDP = $15 - $1.2 = $13.8 trillion.
Finally, let's calculate NI (Net Income), which takes into account Non-income-related taxes net of subsidies.
NI = NDP - Non-income-related taxes net of subsidies
Given Non-income-related taxes net of subsidies is $0.8, we can calculate NI as:
NI = $13.8 - $0.8 = $13 trillion.
Therefore, GDP is $15 trillion, NDP is $13.8 trillion, and NI is $13 trillion.