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This should be fairly simple but I think I am missing something here.

  • Gross Investments: 46
  • Exports: 9
  • Disposable
  • Income: 190
  • Personal Savings: 10
  • Purchases: 84
  • Net Foreign Factor Income: 10
  • Consumption of Fixed Capital: 52
  • Dividends: 13
  • Imports of the U.S.: 12
  • Taxes on Production and Imports: 22
  • Personal Taxes: 38
  • SS Contributions: 23
  • Statistical Discrepancy: 0

What is the net domestic product?

I am calculating 265 but being told it is 255. Am I suppose to subtract savings afterwards?

This is how I am calculating it:

Investments + Purchases + Disposable Income + Exports - Imports - Depreciation(Consumption of Fixed Capital)

46 + 84 + 190 + 9-12 - 52 = 265 then apply - 10 from Personal Savings?

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  • $\begingroup$ Is it Personal Savings or change in personal savings? $\endgroup$
    – Giskard
    Sep 5, 2015 at 11:57

1 Answer 1

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After you get 265 you should take out -10 from Net Foreign Factor Income. This is in there implicity through disposable income etc, but was not produced in the country. Since you want domestic production you must take that out.

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