National Income Determination

The following figures are from data on Good Island Economy

Items	$m
Net private investment	940
Depreciation	56
Compensation of employees	2 256
Corporate taxes	416
Personal taxes	756
Personal Consumption expenditure	4 386
Government purchases	3 182
Indirect business taxes minus subsidies	482
Payment of factor income to the rest of the world	95
Corporate profits minus dividends	56
Government transfer payments and interest	243
Exports	855
Receipts of factor income from abroad	186
Imports of goods and services	385
Social insurance payments	332

Required: Use the above information to answer the following

i.)

Calculate for Good Island:

1. Gross private investment
2. Gross Domestic product
3. Gross National Product
4. Net National Product
5. National income
6. Personal Income
7. Disposable Personal Income

ii)a.Explain the difference between macroeconomics and microeconomics.

b. What are transfer payments? Provide at least three examples.

c. Define GDP. Why aren't intermediate goods counted in GDP?

d. Explain what is meant by the concept of "value added" and how it can be used to calculate GDP.