Question
In: Economics
The table below shows the national income accounts for a hypothetical economy, Metrica. ($ billions) Corporate...
The table below shows the national income accounts for a
hypothetical economy, Metrica.
| ($ billions) | |
| Corporate income | 91 |
| Exports | 67 |
| Wages and salaries | 496 |
| Net international income to the rest of the world | 4 |
| Gross investment | 140 |
| Government purchases | 164 |
| Indirect taxes | 67 |
| Personal consumption | 440 |
| Imports | 24 |
| Depreciation | 69 |
| Proprietors' incomes and rents | 50 |
| Statistical discrepancy | ? |
a. The income-based estimate of Metrica's GDP is
$ billion.
b. The expenditure-based estimate of Metrica's GDP is
$ billion.
c. The value of the statistical discrepancy which is added to the
lower estimate and subtracted from the higher estimate to find a
single GDP value is $ billion.
d. Metrica's GDP is $ billion.
e. Metrica's capital stock (Click to
select) contracted expanded by
$ billion.
f. Metrica's GNI is $ billion. This means that
income earned by the residents of other countries for their
involvement in production in Metrica is (Click to
select) less greater than
income earned by residents of Metrica for their involvement in
production in the rest of the world.
Solutions
Expert Solution
Answer:
a.
Income based GDP of Metrica=Wages and Salaries+Corporate income+Proprietor's income & Rent+Depreciation+Indirect taxes=$496+91+50+69+67 billion=$773 billion.
b.
Expenditure based GDP=Personal consumption+Gross investment+Government purchases+Exports-Imports=$440+140+164+67-24 billion=$787 billion.
c.
Value of statistical discrepancy=$787 billion-$773 billion=$14 billion.
d.
Metrica's GDP at market price=$787 billion.
e.
Metrica's Capital stock expanded by $71 billion.
Capital stock increase=Gross investment-Depreciation.=$140 billion-$69 billion.
f.
Metrica's GNI is $783 billion.(GDP-Net international income to the rest of the world=$787-$4 billion).
This means that income earned by the residents of other countries for their involvement in production in Metrica is Greater than income earned by residents of Metrica for their involvement in production in the rest of the world.
Rahul Sunny answered 1 year agoRelated Solutions
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