Homework Solutions 2 - Measuring Economic Performance ECON 3133 Dr Keen Answers 1 a GDP = C I G X IM = 4,378.2 882.0 1148.4 659.1 724.3 = $6,343.4

Homework Solutions 2 - Measuring Economic Performance ECON...

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Measuring Economic Performance ECON 3133 Dr. Keen Answers 1. a. GDP = C + I + G + X – IM = 4,378.2 + 882.0 + 1148.4 + 659.1 – 724.3 = $6,343.4 billion. b.NNP = GDP + net factor income from abroad – depreciation = 6,343.4 + 5.7 – 669.1 = $5,680.1 billion. c.First calculate NI via the expenditure method: NI= NNP – statistical discrepancy + net subsidies to government businesses – business transfers – sales and excise taxes = 5,680.1 – 2.7 + 9.0 – 28.7 – 525.3 = $5,132.4 billion. Next calculate NIthrough adding up the incomes of different people: NI= compensation of employees + proprietors’ income + corporate profits + net interest

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