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    National Income Accounting Problem

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    National Income Accounting (example problem)

    Selected national income accounting data in $ Billions:

    Personal consumption $250
    Unemployment benefits $20
    Rental income $15
    Dividend income $25
    Interest income $10
    Wages $220
    Federal government purchases $150
    Personal income taxes $35
    State and local government purchases $25
    Exports $45
    Net domestic investment $75
    Imports $50


    A. Using the expenditure approach, compute GDP.

    B. Compute personal income and disposable income.

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    Solution Preview

    Remember GDP = C + I + G + X
    <br>C= Consumption
    <br>I= Investments
    <br>G= Government Expenditures
    <br>X= Net Exports
    <br>Note the following:
    <br>Government Expenditures is equal to ...

    Solution Summary

    The expert computes personal income and disposable income.