Question

The national accounts of Parchment Paradise are kept on​ (you guessed​ it) parchment.

A fire in the statistics office destroys some​ accounts, leaving only the data on the right.

Calculate net domestic product at factor​ cost, the statistical ​discrepancy, and GNP.

Net domestic product at factor cost is ​$6230.

****Statistical discrepancy is ​$_____.**** FIND STATISTICAL DISCREPENCY

Item	​(dollars)
GDP​ (income approach)	7,050
Consumption expenditure	7,300
Indirect taxes less subsidies	700
​Interest, rent, and profit	230
Investment	160
Government expenditure	190
Wages	6,000
Net factor income from abroad	100
Net exports	−400

Answer 1

Net domestic product at factor cost (NDP_FC) = Wages + Interest, rent, and profit

Net domestic product at factor cost = $6000 + $230

Net domestic product at factor cost (NDP_FC) = $6230

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Statistical discrepancy = GDP from expenditure approach - GDP from income approach

(GDP from income approach is given, GDP from expenditure approach must be calculated)

GDP from expenditure approach = C + I + G + NX

GDP = Consumption expenditure + Investment + Government expenditure + Net exports

GDP = $7300 + $160 + $190 - $400

GDP from expenditure approach = $7250

Statistical discrepancy = GDP from expenditure approach - GDP from income approach

Statistical discrepancy = $7250 - $7050

Statistical discrepancy = $200

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GNP = GDP (from expenditure approach) + Net factor income from abroad

GNP = $7250 + $100

GNP = $7350

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