The followingis a list of domestic output and national income figures for a given year. All figures are in billions. The questions that follow ask you to determine the major national income measures by both the expenditures and the income approaches. The results you obtain with the different methods should be the same.

Category	Value
Personal consumption expenditures	$285
Net foreign factor income	4
Transfer payments	12
Rents	14
Statistical discrepancy	8
Consumption of fixed capital (depreciation)	27
Social Security contributions	20
Interest	13
Proprietors' income	43
Net exports	11
Dividends	16
Compensation of employees	263
Taxes on production and imports	18
Undistributed corporate profits	21
Personal taxes	26
Corporate income taxes	19
Corporate profits	56
Government purchases	82
Net private domestic investment	33
Personal saving	30

a. Using the above data, determine GDP by both the expenditures and the income approaches. Then determine NDP.

     GDP using the expenditures approach = $ billion.

GDP using the income approach = $ billion.

NDP = $ billion.

b. Now determine NI in two ways: first, by making the required additions or subtractions from NDP (method 1); and second, by adding up the types of income and taxes that make up NI (method 2).

     Method 1 = $ billion.

     Method 2 = $ billion.

c. Adjust NI (from part b) as required to obtain PI.

     PI = $ billion.

d. Adjust PI (from part c) as required to obtain DI.

     DI = $ billion.

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Part a Using the above data determine GDP by both the expenditures and the income approaches Then de... View the full answer