Question

Table 2 below shows the national income accounting data for the year 2020 in Country A. Using expenditure approach, calculate the following values:

Items RM (Million)
Depreciation 560
Gross private domestic investment expenditures 5980
Imports 9900
Exports 3000
Federal government expenditures 7900
State and local government expenditures 1653
Personal consumption expenditure 8960
Transfer payments 300
Receipts of factor income from the rest of the world 930
Payments of factor income to the rest of the world 1890

(i) Gross domestic product (GDP)

(ii) Net domestic product (NDP)

(iii) Net national product (NNP)

(iv) Real GDP (assume the price index is 115)

(v) GDP per capita (assume the population is 4 million)   

Answer 1

(i)

Calculate the Gross domestic product (GDP) -

GDP = Personal consumption expenditure + Federal government expenditure + State and local government expenditures + Gross private domestic investment expenditure + Exports - Imports

GDP = 8960 million + 7900 million + 1653 million + 5980 million + 3000 million - 9900 million

GDP = 17,593 million

The Gross Domestic Product (GDP) is RM 17,593 million.

(ii)

Calculate the Net domestic product (NDP) -

NDP = GDP - Depreciation

NDP = 17,593 million - 560 million

NDP = 17,033 million

The Net Domestic Product (NDP) is RM 17,033 million.

(iii)

Calculate the Net National Product (NNP)

NNP = NDP + Receipts of factor income from rest of the world - Payments of factor income to the rest of the world

NNP = 17,033 million + 930 million - 1890 million

NNP = 16,073 million

The Net National Product (NNP) is RM 16,073 million.

(iv)

Nominal GDP = RM 17,593 million

Price index = 115

Calculate the Real GDP -

Real GDP = [Nominal GDP/Price index] * 100

Real GDP = [17,593 million/115] * 100 = 15,298.26

The Real GDP is RM 15,298 million

(v)

GDP per capita is calculated using real GDP.

Calculate the GDP per capita -

GDP per capita = Real GDP/Population

GDP per capita = 15,298 million/4 million

GDP per capita = 3,824.5

The GDP per capita is RM 3,824.5