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 ago
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