Question

the tire manufacturer's inventory How much is added to GDP Questions 3: mow their lawns. pay $140K Tina the sole owner of Tina's Lawn Moving, Inc. In one year, TLM collects $1000 K from customers to TLM's equipment depreciates in value by 125 K. TLM pays $600K to ist workers. Who in tases on this income. TLM pays $S0K in corp taxes and pays Tina a dividend of $150K. piys taxes of S60K on this dividend income. TLM retains $75K of earnings in th business to finance future e espansion. How much does this economic activity contribute to each of the following? GDP, NNP. NL Compensation of Employess, Proprietors' Income Corporate Profit, Personal Income, Disposable Personal Income

Answer 1

Calculate GDP: GDP is the total value of all goods and services. Tina, owner of Tina's Lawn Moving collects $1,000,000 from their customers to mow their lawns. Therefore, the GDP is S1,000,000 Calculate NNP: NNP- GDP-Depriciation -(1,000,000-125,000) = $875,000 Therefore, the Net National Product is S875,000.

Calculate personal income: PI - NNP+ dividends-corporate profits (875,000+150,000-275,000) - $750,000 Therefore, the personal income is $750,000. Calculate disposable personal income: DPI -Personal income- tax on dividend income - tax paid by workers (750,000-60,000-140,000) $550,000 Therefore, the disposable personal income is S550,000