5. In theory, in the national income and product accounts, income should equal expenditures. However, when we
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5. In theory, in the national income and product accounts, income should equal expenditures. However, when we add up income from various sources, it differs from expenditures, in part because the government statisticians are unable to count all income and all expenditures precisely. The difference between the two measures is the “statistical discrepancy.” To see how important the statistical discrepancy is, plot the annualized quarterly growth rates of GDP and GDI (gross domestic income)
in one graph. Over the past five years, what is the average difference in the growth rates of GDP and GDI?
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