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Study Problem 3-1 (algo) In the table below, you are given data for the country of Sequoia_ Exports 146 Government spending 206 Consumption 450 Imports 124 Gross investment 131 Net foreign factor income -26 Depreciation 67 Indirect taxes 84 a
Study Problem 3-1 (algo)
In the table below, you are given data for the country of Sequoia_
Exports 146 Government spending 206 Consumption 450 Imports 124 Gross investment 131 Net foreign factor income -26 Depreciation 67 Indirect taxes 84
a. The value of GDP at market prices is $1 I -
b. The value of NDP at basic prices is $
c. The value of net national product at basic prices (i.e. national income) $
Expert Solution
A. Computation of Value of GDP at Market Prices:
Value of GDP at Market Prices = Consumption + Investment + Government Spending + Net Exports
= 450 + 131 + 206 + (146-124)
= 787 + 22
Value of GDP at Market Prices = $809
B. Computation of Value of NDP at Basic Price:
Value of NDP at Basic Price = Value of GDP at Market Prices - Depreciation - Net Indirect Taxes
= 809 - 67 - 84
Value of NDP at Basic Price = $658
C. Computation of Net National Product or National Income at Basic Prices:
Net National Product or National Income at Basic Prices = Value of NDP at Basic Price + Net Foreign Factor Income
= 658 + (-26)
= 658 - 26
Net National Product or National Income at Basic Prices = $632
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