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The following is a hypothetical series of numbers representing expenditure and income figures related to U.S. GDP: Personal consumption expenditures......2349 Net foreign income earned in
The following is a hypothetical series of numbers representing expenditure and income figures related to U.S. GDP:
- Personal consumption expenditures......2349
- Net foreign income earned in the U.S......118.32
- Net exports........................................................ -348
- Depreciation on fixed capital (Calculated by dividing depreciable amount over number of years. In this case 2,000 over 10 years)
- Govt. purchases are 1/8th the value of personal consumption
- Aggregate Wages................................................876
- Rents.........................................................................453
- Investment is 3/8ths of Aggregate Wages
- Interest.....................................................................900
- Properietor (non corporate) income................12
- Corporate profits are 5% of Aggregate Wages
- Indirect Business Taxes.........................................20
Applying both the Expenditure and Income Approaches, calculate hypothetical Gross Domestic Product.In essence, total "expenditures" should " = " "total income." For simplicity we'll assume numbers are in the millions.
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