Answer to Question #292150 in Macroeconomics for nisa

Question

The table below shows the national income statistics for a country.

Items / RM (Million)

Import / RM 6700

Export / RM 8500

Subsidies / RM 480

Consumption / RM 3400

Indirect taxes/ RM 860

Depreciation/ RM 520

Government Expenditure/ RM 4700

Investment / RM 6900

Factor income received abroad/ RM 2010

Corporate tax / RM 620

Factor income paid to abroad/ RM 1800

From the data, calculate:

a) Gross Domestic Product at market price

b) Gross National Product at market price

c) Gross National Product at factor cost

d) Gross Domestic Product at factor cost

e) National Income

Answer 1

Solution:

a.). Gross Domestic Product at market price = Consumption + Government Expenditure + Investment + Corporate tax + Net exports = 3,400 + 4,700 + 6,900 + 620 + (8,500 – 6,700) = RM 17,420

b.). Gross National Product at market price = GDP at market price + Factor income received abroad = 17,420 + 2,010 = RM 19,430

 

c.). Gross National Product at factor cost = GDP at market price – Indirect taxes + Factor income paid to abroad = 17,420 – 860 + 1,800 = RM 18,360

 

d.). Gross Domestic Product at factor cost = GDP at market price – Indirect taxes = 17,420 – 860 = RM 16,560

 

e.). National income = C + G + I + X – M = 3,400 + 4,700 + 6,900 + (8,500 – 6,700) = RM 16,800