Answer to Question #162847 in Macroeconomics for John

Question

Using the following national income accounting data, compute depreciation and GDP by the income approach. All figures are in billions.

 

Profits of corporations and government enterprises before taxes         36

Exports                                                          96

Capital consumption allowances (depreciation)                        X

Government current purchases of goods and services                   96

Net income of farms and unincorporated business                     13

Taxes less subsidies on factors of production                           66

Wages, salaries, and supplementary labour income                     100

Gross Investment                                                 79

Indirect taxes less subsidies                                         18

Interest and investment income                                      60

Personal consumption and expenditures                              82

Imports                                                          18

 

Part 1: What is the value of depreciation    

Part 2: What the value of GDP using the Income Approach

Answer 1

For this case, there are two unknown values yet one equation.

GDP=interest income+depreciation x +business profit + wages+indirect tax + rental income.

Unavailable values are for GDP, X and R

GDP=60+100+36+18+X +R

GDP=214+X+R