Download Lesson 6 – Review Day

Lesson 6 – Review Day
Calculate the GDP, NDP, NI,
PI, DI, and Savings using
BOTH approaches!!!
Transfer payments
16
Government purchases
80
Personal taxes
38
Corporate income tax
Taxes on production and
imports
Social security contributions
Undistributed corporate
profits
Proprietors income
28
Compensation of employees
Personal consumption
expenditures
Consumption of fixed capital
258
Rents
10
US exports
14
Corporate profits
70
Interest
12
Dividends
23
Imports to US
Gross private domestic
investment
Net foreign factor income
17
Statistical discrepancy
35
15
8
19
25
322
4
63
10
**please note – expenditure and income approach
will NOT be the same!!!
Expenditure Approach Answers:
GDP = $462
NDP = $458
NI = $433
PI = $379
DI = $341
S = $19
Income Approach Answers:
GDP = $419
NDP = $415
NI = $390
PI = $336
DI = $298
S =$ -24
The following table shows the price of a specific
stereo receiver for a five-year period. Using year
3 as a base year, calculate the price index for
each year.
Year
1
2
3
4
5
Price
88
100
120
132
140
Price Index
73.3
83.3
100
110
116.7
The following data show nominal GDP and the
appropriate price index for several years. Compute
real GDP for each year and indicate whether you
have “inflated” or “deflated” nominal GDP when
finding real GDP. All GDP numbers are in billions.
Year
1
2
3
4
5
6
Nominal
GDP
117
124
143
149
178
220
Price
Index
120
104
85
96
112
143
Real GDP
97.5
119.2
168.2
155.2
158.9
153.85
Inflated or
Deflated
D
D
I
I
D
D
*What is the inflation rate between years 5 and 6?
27.68%
((143-112)/112) x 100