1. From the table below, gross domestic product equals: a. $1,110 b. $1,265 c. $1,470 d. $1,695 Personal Income Taxes $130 Government Purchases of Goods and $150 Services Gross Private Domestic Investment $230 Net Interest $75 Sales Taxes $35 Net Exports of Goods and Services $55 Personal Consumption Expenditures Depreciation $725 $175

6. Expenditures and Income Approaches Consumption Expenditures Wages Taxes on Production and Imports Government Purchases Statistical Discrepancy Imports Undistributed Corporate Profits Rent Proprietor's Exports Dividends Depreciation Income Interest Gross Private Domestic Investment Corporate Income Taxes Corporate Profits Net Foreign Factor Income $69000 $76000 $16000 $58000 $11000 $47000 $14000 $42000 $15000 $34000 $22000 $24000 $31000 $41000 $18000 $54000 $17000 Complete parts a and b. a. Given the numbers above, solve for Real GDP using the expenditures approach. Given the numbers above, solve for the National Income (NI). b.

1. Study Questions and Problems #1 True or False: Transfer payments reallocate income from one individual to another and are included in government expenditures. Therefore, transfer payments are included in the calculations for GDP. True False

Consider the small economy represented in the following table. All values are in dollars. Firm A Wages paid to employees Taxes paid to government Input purchased from Firm C Revenue received Sold to Public (newly produced) Sold to Government Sold to Firm C Sold from inventory to Public Unsold production After-tax profit Firm B Wages paid to employees Taxes paid to government Input purchased from Firm C Input imported Revenue received Sold to Public (newly produced) Sold to Government Sold to Firm C Sold to a foreign country Sold from inventory to Public Unsold production After-tax profit Firm C Wages paid to employees Taxes paid to government Input purchased from Firm A Input purchased from Firm B Revenue received Sold to Public (newly produced) Sold to Government Sold to Firm A Sold to Firm B Sold to a foreign country Sold from inventory to Public After-tax profit Additional Information Government transfers Interest on government's debt Private Saving 162 96 79 691 61 354 175 124 93…