MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Chapter 8.A, Problem 3TY
To determine
To calculate: The
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Assume there are only two producing sector Y & Z in an economy. Calculate
a) Gross value added at market price by each sector
b) National income from the followings:
Items Amount in Crores
Net factor income from abroad- 20
Sales by Y- 1000
Sales by Z- 2000
Change in stock of Z- 200
Closing stock of Y- 50
Opening stock of Y- 100
Consumption of fixed capital by Y & Z- 180
Indirect taxes paid by Y & Z- 120
Purchase of raw material by Y- 500
Purchase of raw material by Z- 600
Exports by Z- 70
(ACADEMIC)
on
Net interest
$739
Net U.S. income earmed abroad
Wages and salaries
Rental income
36
8,735
237
Other business income
1,202
tof
adjustments less business transfers
Change in business payments
262
Inventories
14
Personal consumption
Proprietorial income
Gross investment spending
Indirect business taxes
1,250
1,128
1,479
1,059
1,194
Corporate profits before taxes
Exports
Depreciation
249
1,833
According to the above table, Gross Domestic Product as calculated by the income approach is
Select one:
O a. $14,925 billion.
O b. $10,646 billion.
O c. $10,121 billion.
O d. $15,619 billion.
Windows
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tion
18:39
ENG G 40
1/03/2021
United Kingdom
Kenya
Price per
Value of
Value of
unit (GBP) output
Оuаntity
Price per
Quantity
unit (KSh)
output
(GBP)
(KSh)
5000 per
75
650,000
Equipment
(millions of
500
unit
units)
Food
500
10 per kg
125
750
(millions of
kg)
Total GDP
(local
currency)
a. If equipment is fully tradable, so that the price in Kenyan shillings (KSh) equals the price
in pounds times the market exchange rate, what is the market exchange rate?
b. Based on its relative price, does it appear that food is tradable? Is it more or less
expensive in Kenya, compared to the UK?
c. Fill in the table above (ignoring cells with "-"). What is the UK's total GDP in GBP?
What is Kenya's total GDP in KSh?
d. What is Kenya's GDP in GBP at market exchange rates?
e. Following the calculations on pp 28-29 of ED, what is Kenya's GDP in pounds
calculated by using UK prices for each individual product and applying that price to
Kenya's quantities (that is, using purchasing power parity [PPP])?
f. Is the value you calculated in…
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- 16 - Which of the following is the production value of a Turkish artisan who produces bread in Karabük? a) GDP B) net national income C) GDP D) GDP vs. GNP TO) Added Valuearrow_forwardITEMS RM (millions) Agriculture 18,000 Mining 12,000 Manufacturing 22,000 Constructions 8,000 Electricity, gas and water 1,800 Transportation and communication 900 Indirect tax 800 Subsidies 700 Government services 1,700 Other services 900 Capital consumption 500 Income received from abroad 750 Income paid to abroad 450 Based on the table above, calculate: a) Gross Domestic Product (GDP) at market price. b) Gross Domestic Product (GDP) at factor cost. c) Gross National Product (GNP) at factor cost. d) national income. e) What approach did you use to make calculation in question (i)? b) The table below shows national income data for a country R. Year Nominal GNP (RM million) Price Index 2017 16 400 100 2018 18 800 108 i) Calculate real income for 2017 and 2018. ii) How much growth rate from year 2017 to 2018?arrow_forwardAssignment If you have the following data that representing an economy of a country as follow: transfer payments 355 Indirect taxes 315 Wages social security deductions personal taxes (direct taxes ) Imports 2335 125 410 350 Rent 250 income of foreigners inside Jordan 450 Exports retained (undistributed) profit 145 70 Interest 360 Depreciations transfer payments 50 355 income of the Jordanian from abroad 300 Gross private investment expenditures corporate taxes Government expenditures 750 275 740 Profit 475 According to the above information answer the following questions: 1. find the following values related to GDP accounts : • Gross domestic product (GDP) according expenditure approach = • Net domestic product (NDP) = • Domestic income (DOI) = • Gross national product (GNP) = • Net national product (NNP) = National income (NI) = Personal income = • Disposable personal income (DPI) = household savings (S) = %3D Cash Dividends ( distributed profit) = 2. Find the Gross Domestic Product…arrow_forward
- Help me pleasearrow_forwardNational income accounting for a certain country in the year for 2020 is given in Table 2. Based on the table, answer the following questions. Amount in $ (million) 180 8,120 3,800 1,320 4,230 12,000 10,120 12,100 8,000 3,120 3,240 Items Net factor income Consumption expenditure Public investments Import Export Government expenditure Wages Interest, rent and profit Indirect taxes Subsidies Depreciation a) By using expenditure approach, calculate Gross Domestic Product (GDP) at market price. b) By using income approach, calculate Gross Domestic Product 9GDP) at market price. c) Based on your understanding on Gross Domestic Product (GDP), explain why do you think that GDP Ís important, and what is the limitation of GDP?arrow_forwardIn the table below, you are given data for the country of Sequoia. Exports Consumption Gross investment Depreciation 188 520 152 88 Government spending Imports Net foreign factor income Indirect taxes a. The value of GDP at market prices is $ b. The value of NDP at basic prices is $ c. The value of net national product at basic prices (i.e. national income) $ ESTarrow_forward
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