Table 12-29
$\begin{array}{|l|c|}
\hline & \begin{array}{c}
\text { Billions of } \
\text { Dollars }
\end{array} \
\hline \text { GDP } & \$ 3,250 \
\hline \text { Depreciation } & 300 \
\hline \text { Retained earnings } & 1,000 \
\hline \text { Personal tax payments } & 500 \
\hline \text { Transfer payments } & 80 \
\hline
\end{array}$
-Refer to Table 12-29.Based on the table above,what is personal income for this economy?

Question

Table 12-29
 $\begin{array}{|l|c|}
\hline & \begin{array}{c}
\text { Billions of } \
\text { Dollars }
\end{array} \
\hline \text { GDP } & \$ 3,250 \
\hline \text { Depreciation } & 300 \
\hline \text { Retained earnings } & 1,000 \
\hline \text { Personal tax payments } & 500 \
\hline \text { Transfer payments } & 80 \
\hline
\end{array}$
-Refer to Table 12-29.Based on the table above,what is personal income for this economy?

Quizplus · Accepted Answer

Personal income is calculated by subtracting retained earnings and corporate taxes from GDP, and then adding transfer payments. Thus, personal income = GDP - retained earnings - corporate taxes + transfer payments = $3,250 billion - $1,000 billion - ($3,250 billion - $300 billion) + $80 billion = $2,030 billion. Therefore, the best choice is B.

Table 12-29 -Refer to Table 12-29