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Numerade Educator

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Problem 4 Easy Difficulty

The table in the next column lists some national accounts data for the United States in 2008
a. Calculate U.S. GDP in 2008 .
$$\begin{array}{lr}
\text { Item } & \text { Billions of dollars } \\
\hline \text { Wages } & 8,000 \\
\text { Consumption expenditure } & 10,000 \\
\text { Other factor incomes } & 3,200 \\
\text { Investment } & 2,000 \\
\text { Government expenditure } & 2,800 \\
\text { Net exports } & -700 \\
\text { Depreciation } & 1,800
\end{array}$$
b. Explain the approach (expenditure or income) you used to calculate GDP.

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Video Transcript

to play with me going over at a calculate you given a table as such, right? So as you can see, this is a national counts at a table for the United States in 2008. And in many of their exams or tests, there will most likely be a question like this where they just give you a table and tell you to find Did you deep eat right? Um, given the two approaches that you guys already know, which is expenditure or income approach. Right? So let's table. So let's go ahead and kabiligi Now for this example, let's go with the expenditure proof. Who could Teoh let you're a teacher or your mother or whoever No slump, what you're going with just so that they could ball along easier. Okay, so we know that the form of this be four consumption expenditure, Senator Plus in that exports right, which you could just do Xmas. So way have to do is sub in these numbers here. So as you could see, it's already given in the tables of consumption, interest, attention. The investment is two K expansion is and looks like the group that experts together so it's just negative. 700. So all we have to do is just calculate this and we should be able to get 14.1 ones just 14 $1,000,000,000 in the national bad accounts of the United States. And so, with references of, um, to fund of use, we used expenditure person, cabinet, GDP, right, And this approach is based was some of all expenditure incurred. Right, So you could see that included assumption, the best man, government and experts, right. All the expenditures done by the United States, the income approach. If you were to use that, we use all the total amount of income occurred at the firm, right? And so it has exceeded table over here, we can see that there are other categories that wages other factor incomes and appreciation. We would use those numbers to calculate GDP with the intimate right. Suppose a correct. It all depends on which method the question asked you to do. And, uh, and that you clearly state what put your going with when you go ahead, Teoh to access the function. It's advocacy. I wrote to the state it expenditure approach, and when you guys answer it, it's it's helpful for you like to sit. So you guys