Answer to Question #132840 in Economics of Enterprise for Fatima

Question

Q1)The following information is extracted from the National Income Accounts of an economy. Particulars Values Exports of goods and services 130
Depreciation 525
Government expenditure 450
Gross domestic investment 750
Imports of goods and services 135
Personal consumption expenditure 27, 500
Find the value of net domestic product

Answer 1

ANSWER

Net domestic product = $28,170

SOLUTION

Net domestic product (NDP)

= Gross domestic product (GDP) - Depreciation.

NDP = GDP - depreciation

GDP = C + I + G + (X - M)

= $27,500 + $750 + $450 + ($130 - $135)

= $28,700 + (-$5)

= $28,695

Thus,

NDP = $28,695 - $525

= $28,170