(a) A hypothetical national income data for a country in particular year is presented below:ITEM $MILLIONWages and salaries 250Income paid abroad 75Income from self-employment 120Stock appreciation 5Interest 10Income received from abroad 50Rent 25Depreciation allowance 3Royalties 2Profits and dividends 35From the data, answer the following questions.Calculate the: Gross Domestic Product (GDP)
Question
(a) A hypothetical national income data for a country in particular year is presented below:ITEM $MILLIONWages and salaries 250Income paid abroad 75Income from self-employment 120Stock appreciation 5Interest 10Income received from abroad 50Rent 25Depreciation allowance 3Royalties 2Profits and dividends 35From the data, answer the following questions.Calculate the: Gross Domestic Product (GDP)
Solution
To calculate the Gross Domestic Product (GDP), we need to add up all the incomes generated within the country. This includes wages and salaries, income from self-employment, interest, rent, royalties, profits and dividends, and income received from abroad. We do not include income paid abroad, stock appreciation, or depreciation allowance as these do not contribute to the domestic product.
Here's the calculation:
GDP = Wages and salaries + Income from self-employment + Interest + Rent + Royalties + Profits and dividends + Income received from abroad
GDP = 120 million + 25 million + 35 million + $50 million
GDP = $492 million
So, the Gross Domestic Product (GDP) of the country for that particular year is $492 million.
Similar Questions
From the following data calculate “National Income” by Income & expenditure methodParameters Amount( Million $)Interest 150Rent 250Govt final consumption expenditure 600Private final consumption expenditure 1200Profit 640Compensation for employees 1000Net Income from abroad 30Net Indirect Tax 60Net Export -40Consumption of fixed capital 50Net Domestic capital formation 340
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