Using the incomes approach, calculate GDP at basic prices based on the numbers from this table: 1 Wages and salaries 2 3 4 5 6 7 8 9 10 11 12 Compensation of employees Net operating surplus: Corporations Gross mixed income Taxes less subsidies on production Net mixed income Taxes less subsidies on products and imports Consumption of fixed capital : Unincorporated businesses Consumption of fixed capital : General government and NPISH Gross operating surplus Employers' social contributions Consumption of fixed capital: Corporations $3545 $3600 $3680 $3725 A value greater than $3725 1800 2000 550 600 45 570 80 30 50 1000 200 400

Part II 1. From the data in the below table, calculate GDP using the expenditure approach: Component Gross investment Personal consumption expenditure Depreciation Government purchases U.S. imports U.S. exports Compensation of employees Amount (billions of dollars) 1300 1475 25 1315 260 249 65

Personal consumption expenditures $4,750 Exports $810 Federal government spending $1,400 Social Security taxes $600 Depreciation $450 Indirect Business Taxes $550 New Residential Construction $800 Imports $850 Non Residential Investment $300 Corporate Income Taxes $200 Corporate Profits $50 Personal Taxes $800 Business Taxes $1,000 Transfer Payments $700 Part A: In the table above and using the Expenditure Approach calculate the Gross Domestic Product (GDP) in millions of dollars  Part B: Now assume that consumers purchase an extra $2000 of goods produced overseas, i.e., the consumption expenditures (from Part A) increase to $6,750. How would this scenario affect the GDP deflator, i.e., increase, decrease, remain unaffected or there is not enough information to tell?

Use the table to answer the questions. Assume firms pay all profits out to resource owners, there is no depreciation, and there are no taxes. 2010 Consumption spending (C) $350 Rent $100 Profit $175 Investment spending (I) $75 Interest $50 Government spending (G) $125 Net exports (NX) $10 Employee compensation $ Enter the value of GDP in 2010. Use the factor income approach to calculate employee compensation in 2010.