How is GDP a measure of both output and income? How is it possible that both measures of GDP – income and expenditure approach – can end up with the same number?

Consumption $300 – Imports $30

Government Purchases $150 – Exports $80

GNP $700

Gross Private Dom. Invest. $100

a. Using the data in the table above, GDP is equal to _______.

b. Using the data in the table above, NX (Net exports) is equal to ________.

c. Using the data in the table above, PCE (Personal Consumption Expenditure) is equal to __________.

d. If the dollar amounts of the items above are the nominal amounts in year 2009, and the quantities of units are identical in years 2000 and 2009 but prices in 2000 were 30% less than 2009, Real GDP in 2009 using 2000 as the base year is equal to __________.

(At least 150 Words)

How is GDP a measure of both output and income? How is it possible that both measures of GDP – income and expenditure approach – can end up with the same number?

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