Textbook - chapter 7 problem #4: Below is a list of domestic output and national income figures for a certain year. All figures are in billions.

Personal consumption expenditures	$245
Net foreign factor income earned	4
Transfer Payments	12
Rents	14
Consumption of fixed capital (depreciation)	27
Social security contributions	20
Interest	13
Proprietor's income	33
Net exports	11
Dividends (part of corporate profits)	16
Compensation of employees (wages)	223
Indirect business taxes	18
Undistributed corporate profits (part of corporate profits)	21
Personal taxes	26
Corporate income taxes (part of corporate profits)	19
Corporate profits	56
Government purchases	72
Net private domestic investment	33
Personal saving	20

a. Using the above data, determine GDP and NDP by the expenditure method ONLY.

ANSWERS:

GDP = $388
GDP = C + Igross + G + Xnet
Igross = Inet + depreciation = 33 + 27 = 60
GDP = 245 + 60 + 72 + 11 = 388

NDP = $361
NDP + C + Inet + G + Xnet
NDP = 245 + 33 + 72 + 11 = 361
NDP = GDP - depreciation
NDP = 388 - 27 = 361

b. Determine NI (national Income = Income EARNED) by addid up the types of income ONLY

NI = $339
NI = wages + rents + interest + profits
profits = corporate profits + proprietor's income
profits = 56 + 33 = 89
NI = 223 + 14 + 13 + 89 = 339

 c and d. You are not required to do this.