<blockquote>
  <p>I disregarded the information about imports and subsidies because I assumed that GDE was calculated using the equation Y=C+I+G+X-M.</p>
</blockquote>

<p>This is where I went wrong. GDE is calculated as C+I+G, but to get GDP at market prices, I need to add nett exports.</p>

CC BY-SA 3.0
2015-04-08T17:10:25.587Z
2015-04-08T17:10:25.587Z
ahorn
<p>Answer is A. R2795279</p>

<p>You take GDE, add Exports, less Imports and get GDP. That is GDP @ market prices.
Then you work backwards, in stead of adding taxes, you deduct them &amp; instead of deducting subsidies you add them. </p>

<p>GDP@ market prices=GDE+X-Z=3251414+891562-987781
                                     =3155195
GDP @ factor cost=GDP @ market prices - taxes + subsidies
                                 =3155195-54166-338792+14358+18684
                                 =2795279</p>

CC BY-SA 3.0
2017-11-11T20:15:52.463Z
2017-11-11T20:21:54.033Z
2017-11-11T20:21:54.033Z
user15166
<p>The question that I am trying to answer is as follows:</p>

<blockquote>
  <p>For a given year, South Africa's Gross Domestic Expenditure (GDE) is R 3 251 414, imports are R 987 781, and exports are R891 562. The table below lists the taxes and subsidies applicable to the South African economy:
  $$\begin{array} {|l|rr|}
\hline
\text{Taxes on production} &amp; \text{R} &amp; 54\ 166 \\
\hline
\text{Taxes on products} &amp; \text{R} &amp; 338\ 792 \\
\hline
\text{Subsidies on production} &amp; \text{R} &amp; 14\ 358 \\
\hline
\text{Subsidies on products} &amp; \text{R} &amp; 18\ 684 \\
\hline
\end{array}$$
  The gross value added at factor cost is</p>
  
  <p>A. R 2 795 279</p>
  
  <p>B. R 2 863 543</p>
  
  <p>C. R 2 835 087</p>
  
  <p>D. R 3 155 195</p>
  
  <p>E. R 3 347 633</p>
</blockquote>

<p>My Answer is R 2 891 498, because I took the GDE and added subsidies and subtracted taxes. I did that because I assumed that the GDE was given at market prices. I disregarded the information about imports and subsidies because I assumed that GDE was calculated using the equation Y=C+I+G+X-M.</p>

<accounting>
A national accounting calculation
ahorn
# A national accounting calculation

(Asked by: username_0 on 2015-04-08)

The question that I am trying to answer is as follows:

> For a given year, South Africa's Gross Domestic Expenditure (GDE) is R 3 251 414, imports are R 987 781, and exports are R891 562. The table below lists the taxes and subsidies applicable to the South African economy:
> $$\begin{array} {|l|rr|}
> \hline
> \text{Taxes on production} & \text{R} & 54\ 166 \\
> \hline
> \text{Taxes on products} & \text{R} & 338\ 792 \\
> \hline
> \text{Subsidies on production} & \text{R} & 14\ 358 \\
> \hline
> \text{Subsidies on products} & \text{R} & 18\ 684 \\
> \hline
> \end{array}$$
> The gross value added at factor cost is
>
> A. R 2 795 279
>
> B. R 2 863 543
>
> C. R 2 835 087
>
> D. R 3 155 195
>
> E. R 3 347 633

My Answer is R 2 891 498, because I took the GDE and added subsidies and subtracted taxes. I did that because I assumed that the GDE was given at market prices. I disregarded the information about imports and subsidies because I assumed that GDE was calculated using the equation Y=C+I+G+X-M.

**Tags:** accounting


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## 2 answers

### Answer by username_0 on 2015-04-08. Score: 2 | Accepted answer

> I disregarded the information about imports and subsidies because I assumed that GDE was calculated using the equation Y=C+I+G+X-M.

This is where I went wrong. GDE is calculated as C+I+G, but to get GDP at market prices, I need to add nett exports.


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### Answer by username_1 on 2017-11-11. Score: -1

Answer is A. R2795279

You take GDE, add Exports, less Imports and get GDP. That is GDP @ market prices.
Then you work backwards, in stead of adding taxes, you deduct them & instead of deducting subsidies you add them.

GDP@ market prices=GDE+X-Z=3251414+891562-987781
=3155195
GDP @ factor cost=GDP @ market prices - taxes + subsidies
=3155195-54166-338792+14358+18684
=2795279


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