Income Approach to Calculating GDP

Part 2: Income Approach to Calculating GDP (weight 45% of the assignment
grade)
Complete the following exercise:
Go to http://www.bea.gov/
Visit the Bureau of Economic Analysis website at www.bea.gov. From the drop
down menu under “Data”, click on “by Economics Account”. Then click on
“National”, “Gross Domestic Product, and “Full Release and Tables”. Use table 7
(Relation of Gross Domestic Product, Gross National Product, and National
Income) and table 8 (Personal Income and its Disposition).

1. Create the table that contains the following information for the
   most recent quarter where data required for this exercise is
   available.
   Please note that using the data for previous years and/or previous
   estimates will produce grade zero for this part of the project.
   Omit the intermediate lines found in Tables 7 and 8 on the web site.
   ∙ Gross domestic product
   ∙ Gross national product
   ∙ Net national product (you should calculate it as Gross national product minus
   Consumption of fixed capital)
   ∙ National income
   ∙ Personal income
   ∙ Personal Disposable Income
   ∙ Personal Savings
   Present the information that you received in your project.
2. Write a report in your own words (2 pages, double-spaced), which contains the
   analysis of the results you received. In this report consider, but do not be limited
   to the following:
3. What is the difference between gross domestic product (GDP) and gross national
   product (GNP)? What is the difference in what GDP measures compared to
   GNP?
4. Based on the table, what calculations must you make to determine GNP from
   GDP?
5. What is national income (NI)? What does NI measure?
6. Which was higher in this year, GNP or NI? By how much?
7. What calculations must you make to determine NI from GNP?
8. NI is composed of a number of categories. What category makes up the largest
   portion of NI?
9. What calculations must you make to determine Personal Income from National
   Income?
10. What calculations must you make to determine Personal Disposable Income and
    Personal Savings?
11. Please analyze and discuss the significance of the data that you received
    for this Data exercise.
12. Reflect on what you have learned from this exercise.