Suppose that in 2011,the national income in the United States was $200 billion,depreciation was $15 billion,personal taxes were $20 billion,and transfer payments were $10 billion.Gross domestic product in 2011 is

Question

Quizplus · Accepted Answer

GDP can be calculated using the formula: GDP = National Income + Depreciation + Indirect Business Taxes + Net Foreign Factor Income + Other. In this question, we have been given the National Income and Depreciation. We do not have any information about Indirect Business Taxes, Net Foreign Factor Income or Other. However, we can assume that the sum of these three components is zero for simplicity. In this case, GDP = National Income + Depreciation = $200 billion + $15 billion = $215 billion. Therefore, B is the correct answer.

Suppose That in 2011,the National Income in the United States