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rents and interest: £150

depreciation: £50

indirect taxes less subsidies: £70

dividends sent abroad: £50

income from agriculture: £70

Compute the value of GNP and GDP

National Income = Employees' compensation + Income of self employed + Corporate profits + Rents and interest = 400 (wages and salaries) + 70 (income from agriculture) + 100 (corporate profits) + 150 (rents and interest) = 720

Net National Product = National Income + Indirect taxes less subsidies = 720 + 70 = 790

GNP = Net National product + Capital depreciation = 790 + 50 = 840

GDP = GNP + Net payments of income from/to abroad = 840 - 50 = 790

Investment = £200 is not used because already included in National Income.

Money supply = £450 is the amount of money supplied to the economy. It is not included in the national accounts.

31/07/97

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