In one year in the country of Countem, workers earned $4150, proprietor's income was $392, rental income was $20, corporate profits were $683,
net interest was $228, taxes on production and imports were $329, business current transfer payments were $12, the current surplus of government enterprises was $3, statistical discrepancy was $28, consumption of fixed capital was $882, factor income received from the rest of the world was $331, and payments of factor income to the rest of the world was $623. Based on these data, compute national income, net national product, gross national product, and gross domestic product.
The first eight items sum to national income, which equals $5817. Adding the statistical discrepancy to national income gives net national product, which is thus $5845. Adding consumption of fixed capital to that gives gross national product, which is thus 6727. Subtract net factor income, which equals factor income received from the rest of the world minus payments of factor income to the rest of the world ($331 - $623 = -$292), from gross national product equals gross domestic product, which is thus $7019.
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Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and demand deposits are the only form of money. A commercial bank receiving a new demand deposit of $100 would be able to extend new loans in the amount of
A. $10.
B. $90.
C. $100.
D. $1,000.
Average fixed costs of production
A) will rise at a fixed rate as more is produced. B) remain constant. C) graph as a U-shaped curve. D) fall as long as output is increased.
A price cut will decrease the total revenue a firm receives if the demand for its product is: a. elastic
b. inelastic. c. unit elastic. d. unit inelastic.
Why does an economy need a rationing mechanism?
A) because of scarcity B) because it preserves the power of the wealthy C) because it eliminates poverty D) All of the above are correct.