I have a questions about problem 11 in the CFAI End-of-chapter problems, reading 17.
Could someone explain why they don’t include statistical discrepancy when they calculate GDP and get to 22.6 in the solution? According to the definition on page 216, it seems to me that this should be included when calculating GDP.
I hope you can help.
… And also, why is Capital Consumption Allowance (CCA) not included in the GDP in the solution? Shouldn’t it be?
For the question you need to calculate GDP using the expenditure approach (C + I + G + NX). Then you can use the income approach of calculating GDP to work out National Income as GDP = NI + CC + SD and you’ve just worked out GDP and CC and SD are given in the question so you can solve for NI.