What is the income-based estimate of the economy's gross domestic product using the data in the table in the link below? http://postimage.org/image/uxa0gr3cf/ Question 2.
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The income based estimate for GDP is calculated by adding together the following things:
- Employee compensation
- Rent
- Interest
- Proprietors’ incomes
- Corporate profits
- Indirect business taxes
- Depreciation
- Net foreign factor income
In the table, we can see that employee compensation is (all figures in billions of C$) 76, rent and proprietors’ incomes are 29, interest income is 17, corporate profits are 38, indirect taxes are 25. We are not given a figure for net foreign factor income. We can calculate depreciation by taking gross investment – net investment. That gives us a figure of 9.
We must now add all of these figures. 76+29+17+38+25+9 = 194.
Therefore, our estimate for GDP using the income approach is C$194 billion.
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