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# National income account

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Given these figures (see attachment), how to calculate the compounded annual rate of growth for the third quarter ( 2 decimal places I suppose) for:

1) Real GDP
2) Final sales
3) Gross domestic purchases
4) FSDP
5) Is GDP due to strong US demand, or other factors?
6) What percentage contribution did change in business inventories have on Real GDP growth??
7) What percentage contribution did net exports have on Real GDP growth?
8) If GDP in Q2, 2002 was \$ 9392.4 billion, what is the compounded annualized rate of growth between Q2 2002 and Q3, 2003?

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#### Solution Preview

1) Real GDP
The growth rate = percentage change in GDP
Then change in GDP = (GDP3 - GDP2)/ GDP2
%dGDP =(9,797.20-9,629.40) / 9,629.40 = 167.80/9,629.40 = 0.02
So the compounded annual rate of growth is
g(GDP)= (1+%dGDP)^4 -1 = 0.07 = 7%

2) Final sales
change in Sales = (Sales3 - Sales2)/ Sales2
%d Sales =(9,814.70 -9,631.10) / 9,631.10 = 183.60/ 9,631.10= 0.02
So the compounded annual rate of growth is
g(Sales)= (1+%dSales)^4 -1 = 0.08 = 8%

3) Gross domestic purchases
change in ...

#### Solution Summary

National income account problem is worked.

\$2.49