Tambela Vaughn_ECO-610-X2269 Fiscal & Monetary Policies 15TW2_Module 2 Homework - 2 The following are data for the US economy for 2000 in billions

Tambela Vaughn_ECO-610-X2269 Fiscal & Monetary Policies 15TW2_Module 2 Homework

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2.) The following are data for the US economy for 2000 in billions of dollars:Net rental income of persons141.6Depreciation1,241.3Compensation of employees5,715.2Personal consumption expenditures6,728.4Sales and excise taxes762.7Business transfer payments43.9Statistical discrepancy-130.4Gross private domestic investment1,767.5Exports of goods and services1,102.9Net subsidies of government business37.6Government purchases of goods and services1,741.0Imports of goods and services1,466.9Net interest532.7
Proprietors income 715.0 Corporate profits 876.4 Net factor income from rest of world -12.1 A: Compute GDP using the spending approach Gross Domestic Product (Y) = 6,728.4 + 1,767.5 + 1,741.0 + (-638.1) = 9,598.8 B: Compute net domestic product Net Domestic Product (NDP) = 9,598.8 − 1,241.3 = 8357.5 C: Compute national income two ways National Income (Method 1) = 9,598.8 + (-12.1) -1,241.3 - 762.7 - 43.9 – (-130.4) + 37.6 = 7,706.8 National Income (Method 2) = 5,715.2 + 715.0 + 141.6 + 876.4 + 532.7 = 7980.9 4.) The consumer price index for the 1978-82 period and the GDP deflator follow. This was a period of unusually high, but declining, inflation. (The CPI is equal to 100 in the base years, 1982-4; the GDP deflator is equal to 100 in the base year 1987.) CPI GDP Deflator 1978 65.2 60.3 1979 72.6 65.5 1980 82.4 71.7