Exercise Set 7
NATIONAL INCOME ACCOUNTING


I. Objectives

  1. To understand the components of aggregate expenditure
  2. To compute gross domestic product and gross national product

II. Data


III. Questions 

Go to the Bureau of Economic Analysis (opens in a new window). In the column on the left, click on Gross Domestic Product. Click on Interactive Data Tables. Click on Section 1. Click on Table 1.1.5. Gross Domestic Product. This will give you seasonally adjusted nominal GDP by quarter at annual rates.
  1. Most recent quarter = ____________.
  2. Obtain data for the relevant items in the national income accounts for the most recent quarter (in billions of current dollars) and compute the following: C, I, G, (X-IM) and GDP. Show your computations.
  3. Compute the proportion of each component of spending in GDP:
    1. Consumption accounts for ______ % of GDP.
    2. Investment accounts for ______ % of GDP.
    3. Government expenditure accounts for ______ % of GDP.
    4. Exports account for ______ % of GDP.
    5. Imports account for ______ % of GDP.
  4. Spending on services accounts for _____% of personal consumption expenditures.
  5. The U.S. has a [ deficit / surplus ] of $ ________ billion in the balance of goods account
  6. The U.S. has a [ deficit / surplus ] of $ _________ billion in the balance of services account.
  7. On the BEA website, go to Table 1.7.5. Relation of Gross Domestic Product, Gross National Product, Net National Product, National Income, and Personal Income
    1. For the latest quarter, obtain "Income receipts from the rest of the world" and "Income payments to the rest of the world".
    2. Compute Gross National Product.
  8. Go to Table 1.1.6 Real Gross Domestic Product, Chained Dollars.
    1. For the latest quarter, real GDP is $ __________ billion.
    2. Why is this different from the nominal GDP computed in Question 2?
  9. How much did the economy grow in the latest quarter (compared to the preceding quarter, expressed in annual rates)? Use data for real GDP for the two quarters from Table 1.1.6.
    1. To obtain annual rates, remember to multiply the percent quarterly change by 4.
    2. Verify your answer from Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product.

Solution
http://www.screencast.com/t/OTd9Zcq7gvBB