GDP identity and national income accounting
1) Suppose the government cuts its purchases by $120 billion. As a result, the budget deficit is reduced by $40 billion, private domestic saving decreases by $10 billion, disposable personal income decreases by $80 billion and the business deficit is reduced by $15 billion. By how much has national income (Y) changed?
2) Use the subsequent information to answer the questions below:
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Data are in Trillions of Dollars
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Personal consumption expenditures $3)0
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Net private domestic investment $1)4
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Depreciation $0.2
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Government purchases of goods and services $2)0
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Exports $0.5
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Imports $0.3
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Foreign factor income $0.1
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a) Compute the GDP
b) Compute the net exports