Reference no: EM131236594

The following table shows macroeconomic data for a hypothetical country. All figures are in billions of dollars. Billions of Dollars Gross private investment (investment) 90 Capital consumption allowance (depreciation) 25 Exports 45 Imports 35 Government purchases 170 Personal consumption expenditures (consumption) 300 Indirect business taxes 30 Social insurance taxes 11 Corporate profit taxes 7 Undistributed corporate profits 7 Transfer payments 55 Personal taxes 100 Compensation of employees 400 Corporate profits 100 Rental income (of persons) 15 Net interest 25 Proprietors' income 10 Income earned from the rest of the world 95 Income earned by the rest of the world 60 The five components of GDP from the table that together sum to national income are , , , , and . National income can also be calculated based on disposable income. Use the following table to derive personal income and national income (in billions of dollars). Specify what needs to be added to disposable income to arrive at personal income, and explain how personal income should be adjusted to find national income. Billions of Dollars Disposable income 480 Plus + Personal income = Plus social insurance taxes + 11 Plus + Plus undistributed corporate profits + 7 Minus – National income = National income is the total amount earned by the citizens of a country, while gross domestic product is the total value of goods and services produced within a country. To determine gross domestic product, you have to make some adjustments to national income. Use the following table to derive gross domestic product and, as part of the process, net domestic product (NDP) (in billions of dollars). Again, specify what should be added to and subtracted from national income to arrive at net domestic product, and what should be added to net domestic product to arrive at gross domestic product. Billions of Dollars National income Plus indirect business taxes + 30 Plus + Minus – Net domestic product (NDP) = Plus + Gross domestic product (GDP) =