Problem
2021: GDP Components ($ Million) Corporate profits 6,500 Wages 850 Second hand goods 1,000 Net interest income 1,450 Private consumption 3,200 Government purchases 4,800 Subsidy 200 Transfer payment 450 Gross domestic fixed capital formation 500 Increase in inventory 950 Depreciation 750 Export of goods 2,500 Export of services 3,200 Import of goods 2,400 Import of services 1,800 Rental income 800 Indirect taxes 800.
A. Calculating gdp use the expenditure approach; and the income approach
B. Based on the findings in part A, calculate the per capita GDP if the size of the population of Country G was 7.5 million.
C. The financial tsunami was hitting Country G hard so the government decided to increase its government purchase by $400 million. Given that the slope of the aggregate expenditure curve of Country G is 0.8, calculate the effect of this increase of government expenditure on Country G's Gross Domestic Product.