Answer to Question #304906 in Macroeconomics for james mugo

Question

Suppose you are given the following information about some hypothetical economy and its national income accounts. Use this information to answer the questions that follow. (Amounts are in billions of dollars)

Indirect Business Taxes

$198

Corporate profits

$251

Corporate profits taxes

$96

Retained earnings

$74

Proprietors' income

$123

Rents and interest earned

$148

Exports

$157

Imports

$224

Income Earned from rest of world by US citizens

$219

Income Earned by rest of world in US

$219

Net Domestic Product

$2151

Government expenditures

$483

Transfer Payments

$510

Social Security Taxes (employee & employer)

$370

Consumption expenditures

$1505

Gross Investment

$470

Disposable personal income

$1673

Required;

                   gdp

Answer 1

GDP=$C+I+G+X_n$

Where

C is consumption expenditures

I is gross investment

G is government expenditures

X_n is net exports

$GDP=\$1505+\$470+\$483+(\$157-\$224)$

$GDP=\$2291$ (billions)