Application Gross Domestic Product

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 Gross Domestic Product                                      Name:

     1. Using the Expenditure Approach analyze each of the following scenarios.
               Determine the type of good being purchased and whether it should be counted or not.
               If counted, what category(s) will the expenditure will be reflected under?
               Evaluate what the net effect will be on GDP.

         Expenditure                  Good              C                   I         G      X         Net
                                                                                                      on US

                                  -Final          - Durable           - Fixed             -Export    -$↑
                                  -Intermediate   - Non-durable       - Inventory         -Import    -$↓
                                  -Resale         - Service            -Residential                  -none

$25,000 Toyota Camry                  Final              -                  -         -    Export    $25,000
produced in US & sold to                                                                                ↑
woman in Japan.
A Textbook company buys
 $5 of paper to use in the
production of a Econ book.
A newly constructed house in
Las Vegas is bought by a
family of five for $300,000.
US Steel Corporation builds a
new manufacturing plant for 1
million dollars in Mississippi.
A High School student buys a
$120 I-Pod at Best Buy.
A recent College Graduate
purchases a ten year old condo
in Del Mar.
Your best friend buys you a
$15 Chia-Pet made in Mexico
as a Holiday gift.
US Federal Government
purchases a Boeing 747 for
19 million dollars.
A sixteen year old buys her
first car, a 4 decades old
Volkswagen Bug for $500.
A New-Car retailer has
$900,000 worth of cars sitting
on his lot ready to sell at the
end of the year.
2. Using the Income approach complete the following table based on the data provided.

  Consumption Expenditures           9,710        Consumption Expenditures              10,058
  Wages                              7,812        Wages                                 7,432
  Government Expenditures            2,674        Government Expenditures               2,883
  Exports                            1,662        Exports                               1,867
  Imports                            2,370        Imports                               2,533
  Profits                            2,698        Profits                               1,668
  Rent                               40           Rent                                  44
  Investment Expenditures            2,130        Investment Expenditures               2,004
  Interest                           664          Interest                              631
  Indirect business taxes            1,055        Indirect business taxes               926
  Capital Consumption Allowance      1,720        Capital Consumption Allowance         1,624
  Net Income of Foreigners           102          Net Income of Foreigners              78
  Income earned but not received     105          Income earned but not received        764
  Income received but not earned     676          Income received but not earned        482
  (Government Transfer Payments)                  (Government Transfer Payments)
  Personal Income Taxes              4,000        Personal Income Taxes                 6,000

  Statistical Discrepancy                         Statistical Discrepancy

  GDP (Expenditure approach)                      GDP (Expenditure approach)

  GDP (Income approach)                           GDP (Income approach)

  GNP                                             GNP

  NNP                                             NNP

  National Income                                 National Income

  Personal Income                                 Personal Income

  Disposable Income                               Disposable Income