Gross Private Domestic Investment Exports of the United States Disposable Income Personal Saving Government Purchases Net Foreign Factor Income Consumption of Fixed Capital Dividends Imports of the United States Taxes on Production and Imports Personal Taxes Social Security Contributions Statistical Discrepancy $ 46 9 190 10 84 10 52 13 12 22 38 23 0
Gross Private Domestic Investment Exports of the United States Disposable Income Personal Saving Government Purchases Net Foreign Factor Income Consumption of Fixed Capital Dividends Imports of the United States Taxes on Production and Imports Personal Taxes Social Security Contributions Statistical Discrepancy $ 46 9 190 10 84 10 52 13 12 22 38 23 0
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
I do not know which is which to add together to find National Income?
Transcribed Image Text:### Economic Data Overview
This table presents various components of a nation's income and expenditure, critical for understanding economic activity. Here is a breakdown of each item:
1. **Gross Private Domestic Investment**: $46
- Represents the total spending on goods that will be used for future production.
2. **Exports of the United States**: $9
- The total value of goods and services sold to foreign countries.
3. **Disposable Income**: $190
- The total personal income available to households after taxes, the amount they can spend or save.
4. **Personal Saving**: $10
- The portion of disposable income that households save rather than spend on consumption.
5. **Government Purchases**: $84
- Refers to goods and services purchased by the government sector.
6. **Net Foreign Factor Income**: $10
- Income residents receive from abroad for providing factor services minus similar payments made to non-residents.
7. **Consumption of Fixed Capital**: $52
- Depreciation of the nation's stock of capital goods over time.
8. **Dividends**: $13
- The portion of corporate profits paid out to shareholders.
9. **Imports of the United States**: $12
- The total value of goods and services purchased from abroad.
10. **Taxes on Production and Imports**: $22
- Taxes imposed on goods and services produced domestically and imported.
11. **Personal Taxes**: $38
- Taxes paid by individuals on their income, including federal and state taxes.
12. **Social Security Contributions**: $23
- Payments made to social security programs, deducted from wages.
13. **Statistical Discrepancy**: $0
- Used to reconcile any difference between aggregate income and aggregate expenditure.
This data provides an insight into the economic activities and financial flows within this context.
Transcribed Image Text:**Economic Data Table**
1. **Gross Private Domestic Investment**: $46
2. **Exports of the United States**: $9
3. **Disposable Income**: $190
4. **Personal Saving**: $10
5. **Government Purchases**: $84
6. **Net Foreign Factor Income**: $10
7. **Consumption of Fixed Capital**: $52
8. **Dividends**: $13
9. **Imports of the United States**: $12
10. **Taxes on Production and Imports**: $22
11. **Personal Taxes**: $38
12. **Social Security Contributions**: $23
13. **Statistical Discrepancy**: $0
This table provides a snapshot of various economic indicators that help in analyzing the economic activities of a country. Each item represents a different aspect of the economy, showing the flow of financial resources in various sectors from investment to public spending. Understanding these indicators is crucial for evaluating economic health and making informed policy decisions.
Expert Solution
Step 1: Define National income
GDP is the gross domestic product.
GDP is defined as the market value of all the final goods and services produced in an economy within the period of one year.
GDP or Aggregate demand is the sum of consumption, investment, government spending and net export.
This means,
AD = C + I + G + NX
NX = X - M
Where,
C is consumption
I is investment
G is government spending
NX is net export
X is export
M is import.
NNP(FC) = GDP - Consumption of fixed capital +Net factor income from abroad (NFIA)
NNP(FC) is also known as National income.
NNP(FC) is Net National Product at factor cost.
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