Total disposable income of residents (Yp) is equal to gross income (Y) minus taxes (T) plus net income from international transfers (R). Private sector total saving is income less consumption (i.e. S = Yp â C). Domestic absorption is private sector consumption (C) plus investment (I) plus government expenditure (G). Foreign demand for domestic goods and services is defined as net exports, i.e. export (X) minus import (Z).
The current account of Country was in deficit of 1% of GDP and the government run budget deficit of 3% to GDP in 2015. Based on the macroeconomic identity derived in section (a), what was the net savings position of the country's private sector (relative to GDP)?
Total disposable income of residents (Yp) is equal to gross income (Y) minus taxes (T) plus net income from international transfers (R). Private sector total saving is income less consumption (i.e. S = Yp â C). Domestic absorption is private sector consumption (C) plus investment (I) plus government expenditure (G). Foreign demand for domestic goods and services is defined as net exports, i.e. export (X) minus import (Z).
The current account of Country was in deficit of 1% of GDP and the government run budget deficit of 3% to GDP in 2015. Based on the macroeconomic identity derived in section (a), what was the net savings position of the country's private sector (relative to GDP)?
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5. The income approach The following table shows macroeconomic data for a hypothetical country. All figures are in billions of dollars.
National income can also be calculated based on disposable income. Use the following table to derive personal income and national income (in billions of dollars). Specify what needs to be added to disposable income to arrive at personal income, and explain how personal income should be adjusted to find national income.
National income is the total amount earned by the citizens of a country, while gross domestic product is the total value of goods and services produced within a country. To determine the gross domestic product, you have to make some adjustments to national income. Use the following table to derive gross domestic product and, as part of the process, net domestic product (NDP) (in billions of dollars). Again, specify what should be added to and subtracted from national income to arrive at the net domestic product, and what should be added to the net domestic product to arrive at the gross domestic product.
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