2. Calculate
(a) gross private domestic investment (b) GDP
(c) change in capital (d) GNP
(e) NNP (f) national income
(g) compensation of employees (h) personal income
(i) disposable personal income
based on the data below.
Amount of national income not going to households 327.6
Corporate profits 1,376.3
Depreciation 1,814.8
Dividends 809.9
Exports 1,819.9
Government purchases 2,802.3
Imports 2,558.4
Indirect taxes less subsidies 990.0
Net business transfer payments 118.4
Net interest 787.4
Net private domestic investment 384.0
Payments of factor income to the rest of the world 697.6
Personal consumption expenditures 10,065.7
Personal interest income 1,313.7
Personal income taxes 1,535.8
Personal transfer receipts 1,793.2
Proprietors' income 1,107.3
Receipts of factor income from the rest of the world 890.0
Rental income 182.4
Social insurance contributions 988.3
Statistical discrepancy 77.9
Surplus of government enterprises -16.0
(a) Gross private domestic investment =
(b) GDP =
(c) Change in capital =
(d) GNP =
(e) NNP =
(f) National income =
(g) Compensation of employees =
(h) Personal income =
(i) Disposable personal income =
6. A market basket consists of 3 goods: A, B, and C. The table below lists their quantities in the basket and
their prices in 2012, 2013 and 2014.
Good Quantity 2012 price 2013 price 2014 price
A 200 $10 $11 $12
B 400 $6 $7 $8
C 300 $14 $15 $15
(a) Let 2013 be the base year. Complete the table below.
Year Value of the market
basket
Price index Inflation rate
2012
2013
2014
(b) The table below shows the hourly nominal wage and the nominal interest rate from 2012 to 2014:
Year Nominal
Wage
% Real Wage % Nominal
Interest Rate
Real Interest
Rate
2012 $10.00 10%
2013 $10.60 12%
2014 $11.50 14%
(%: percentage change)
Complete the table above.
(c) If lenders and borrowers use the inflation rate in 2013 as their prediction of inflation rate in 2014, will
borrowers gain or lose in 2014? Why?
remove inflation between base year and current year
(d) What should be the nominal wage in 2014 for a worker to maintain his standard of living in 2012?
(Hint: Real wage=Nominal wage/(Price index/100) is a measurement of wage using base year money. It is the wage to earn if
people pay base year prices to buy goods and services. To be able to buy as many things as in 2012, the real wage in 2014
needs to be the same as the real wage in 2012.
Or: Nominal wage in 2012 needs to change by as much as the inflation from 2012 to 2014 when it becomes nominal wage in
2014)