Solution to Problem Set 11-12 _ECO100_

# Solution to Problem Set 11-12 _ECO100_ - Prof Gustavo...

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Prof. Gustavo Indart Department of Economics University of Toronto ECO 100Y INTRODUCTION TO ECONOMICS Solution to Problem Set 11-12 1. a) Net Domestic Income 195,000 + 35,000 + 20,000 + 30,000 = 280,000 b) Gross Domestic Product 280,000 + 42,000 + 38,000 = 360,000 c) Consumption 360,000 – 75,000 – 90,000 – 97,000 + 155,000 = 253,000 d) Personal Income 280,000 – 15,000 – 10,000 + 20,000 + 10,000 = 285,000 e) Savings 285,000 – 60,000 – 253,000 = – 28,000 2. a) Gross Domestic Product as Aggregate Expenditure AE = 173,000 + 65,000 + 67,000 + 85,000 - 95,000 = 295,000 b) Net Domestic Income calculated from Aggregate Expenditure NDY = 295,000 – 35,000 – 25,000 = 235,000 [= GDP – Ind Tx – Dep] c) Net Domestic Income calculated from factor cost NDY = 170,000 + 40,000 + 15,000 + 10,000 = 235,000 [= W&S + inc Profit + uninc Net Income & Rent + Interest] d) Net Domestic Product 295,000 – 35,000 = 260,000 (or 235,000 + 25,000) [or consistent with a] e) Personal Disposable Income

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Solution to Problem Set 11-12 _ECO100_ - Prof Gustavo...

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