From the following table, compute the National Income. Economic Data for PEMBROKIA (Billions of...

Question:

From the following table, compute the National Income.

Economic Data for PEMBROKIA
(Billions of Dollars)
Government purchases 200
Net exports 7
Consumption spending 540
Personal taxes 94
Investment spending 175
Depreciation 52
Transfer payments 68
Net nonbusiness interest income 59
Net foreign factor income 5
Wages and salaries 500
Corporate retained earnings 45
Rental income 35
Indirect business taxes 50
Interest income 140
Social Security contributions 58

Net Exports:

Net exports is the difference between exports and imports. If exports are greater than imports then net exports are positive. In the case of an increase in exports more than increase in imports then net exports are negative.

Answer and Explanation:


Expenditure method

National income = Consumption + Investment + Government expenditure + Net exports

National income = 540 + 175 + 200 + 7

National income = 922

Therefore, the national income is 922.


Learn more about this topic:

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Gross Domestic Product: Definition and Components

from Economics 102: Macroeconomics

Chapter 4 / Lesson 3
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