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Disposable Personal Income

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The following data describes an economy:

Transfer Payments $72
Interest paid by consumers 4
Net exports 4
Indirect Business taxes 47
Net foreign Factor Income 2
Net Nonbusiness Interest Income 10
Contribution for Social Insurance 35
Personal Taxes 91
Corporate Retained Earnings 51
Gross Private Investment 185
Government Purchases 195
Personal Consumption 500
Depreciation 59

On the basis of this data, calculate: GDP, GNP, NDP, NI, personal income, disposable personal income.

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Solution Summary

Disposable Personal Income is achieved.

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The formulas that we will need are:

GDP = C + I + G + NX
GNP = GDP + Net Foreign Factor Income
NDP = GDP - Depreciation
NI = GNP - Depreciation - Indirect Taxes
Personal Income = NI - corporate taxes - retained earnings - ...

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