Question

In: Economics

Consider the following hypothetical data for U.S economy in 2020 (all amounts are in trillions of...

Consider the following hypothetical data for U.S economy in 2020 (all amounts are in trillions of dollars)

Statistical Discrepancy 4
Depreciations 3
Exports 4
Gross private domestic investment 7
imports 6
Government purchases 6
Personal consumption expenditure 9
net foreign factor income 5

Based on the above data

1. What is the gross Domestic product ?

2. What is the new cosmetic Product?

3/ What is the national income?

Solutions

Expert Solution

1.

Gross Domestic Product = Personal consumption expenditure + Government purchases + Gross private domestic investment + Exports - imports

= 9 + 6 + 7 + 4 - 6

= 20 trillion dollars

2.

Net Domestic Product = Gross Domestic Product - Depreciation

=20 -3

=17 trillion-dollar

3.

Gross Domestic Income = Gross Domestic Product - Statistical Discrepancy

=20-4

=16 trillion-dollar

National Domestic Income = Gross Domestic Income - Depreciation

=16-3

=13 trillion-dollar

Hence,

National Income = National Domestic Income + Net factor income

= 13 + 5

=18 trillion-dollar


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