The Gross Domestic Production for 2006 is listed below:
Compensation for employees = K2550.9 million
Private Consumption = K7959.0 million
Fixed Capital Formation = K2652.6 million
Gross Operating Surplus = K11994.5 million
Domestic Factor Income = K985.0 million
Government Consumption = K2837.6 million
Net exports = K3447.3 million
Net Factor Income= K4325.5
From the information given above answer the following questions:
1. Calculate the Gross Domestic Production (GDP) using the Expenditure Method.
2. Calculate Gross National Production (GNP)
Showing full work, including Showing how you get new figures
1. To calculate GDP using the Expenditure Method:
GDP = Private Consumption + Government Consumption + Fixed Capital Formation + Net Exports
GDP = K7959.0 million + K2837.6 million + K2652.6 million + K3447.3 million
GDP = K16896.5 million
Therefore, the GDP using the Expenditure Method for 2006 is K16896.5 million.
2. To calculate GNP:
GNP = GDP + Net Factor Income
GNP = K16896.5 million + K4325.5 million
GNP = K21222.0 million
Therefore, the GNP for 2006 is K21222.0 million.
According to the GDP for 2006, find the:
Consumption expenditure (C)
Investment expenditure (I)
government expenditure (G)
Export (X)
Import (M)
To find the different components of the GDP based on the information given:
Private Consumption (C) = K7959.0 million
Government Consumption (G) = K2837.6 million
Fixed Capital Formation (I) = K2652.6 million
Net Exports (X - M) = K3447.3 million
Since Net Exports is given as a single figure, we need to calculate Export (X) and Import (M) separately.
Net Exports (X - M) = X - M
3447.3 = X - M
We know that Net Factor Income = exports - imports
4325.5 = X - M
X - M = 4325.5
Now we can solve the system of equations to find Export (X) and Import (M):
X - M = 4325.5
X - M = 3447.3
By solving these equations, we find:
X = 3886.4 million
M = 561.1 million
Therefore:
Consumption expenditure (C) = K7959.0 million
Investment expenditure (I) = K2652.6 million
Government expenditure (G) = K2837.6 million
Export (X) = K3886.4 million
Import (M) = K561.1 million
Pardon not government consumption but find the government expenditure
To find the government expenditure based on the GDP for 2006:
Government Expenditure = Government Consumption + Government Investment
Given that Government Consumption is K2837.6 million, we need to find Government Investment.
Government Investment = Gross Operating Surplus - Compensation for Employees - Domestic Factor Income
Government Investment = K11994.5 million - K2550.9 million - K985.0 million
Government Investment = K9338.6 million
Now we can calculate Government Expenditure:
Government Expenditure = Government Consumption + Government Investment
Government Expenditure = K2837.6 million + K9338.6 million
Government Expenditure = K12176.2 million
Therefore, the government expenditure for 2006 is K12176.2 million.