3 1 measuring national income
Download
1 / 16

3.1 Measuring National Income - PowerPoint PPT Presentation


  • 170 Views
  • Uploaded on

3.1 Measuring National Income. Circular Flow of Income. National income Sum of all final goods and services produced in an economy during a given time period. (1yr) E=O=Y. Simple Two-Sector Model. Leakages? Injections? What is missing? Total injections= Total Leakages. Transfer Payments.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about '3.1 Measuring National Income' - reuel


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

Circular flow of income l.jpg
Circular Flow of Income

  • National income

    • Sum of all final goods and services produced in an economy during a given time period. (1yr)

    • E=O=Y



Slide4 l.jpg

Leakages?

Injections?

What is missing?

Total injections= Total Leakages


Transfer payments l.jpg
Transfer Payments

  • How are welfare, education, social programs accounted for?

  • Rule: Only expenditure flows which have a corresponding output are counted.


Methods of measurement l.jpg
Methods of Measurement

  • Factor Income: Total payments for FOP

    • Employment

    • Rental Income

    • Profits

    • Interest

    • Subtract stock appreciation

    • =GDP at factor cost


Slide7 l.jpg


Slide8 l.jpg

  • Output Method

    • Value-added at each level of output (to avoid double counting)


National and domestic product l.jpg
National and Domestic Product

  • GDP=output created using Domestic FOP

  • How do you deal with foreign owned companies within economy?

  • Domestic assets held abroad?

  • GNP (Gross National Product)

    = GDP+Net property income from abroad


Slide10 l.jpg

  • LDC= GDP>GNP Why?

    • They have few companies abroad that are repatriating income.

  • MDC=GNP>GDP

    • Many companies abroad


Gross and net national product l.jpg
Gross and Net National Product

  • NNP= GNP-Depreciation


Nominal vs real l.jpg
Nominal vs. Real

  • Nominal= face value

  • Real= adjusted for inflation

  • GDPr= GDPnom/CPI X 100


Consumer price index cpi l.jpg
Consumer Price Index (CPI)

  • Base Line= 100

  • CPI of 106 = 6% increase in prices


Gdp deflator l.jpg
GDP Deflator

  • CPI: only consumer goods

  • GDP Deflator: All goods in GDP

  • GDPreal = GDP nom / Deflator X 100


Total and per capita l.jpg
Total and Per Capita

  • Income per capita = GDP/population

  • Real Income per capita: adjusted for inflation

  • Which countries do you think are in the top ten by GDP per capita?


Gdp by country l.jpg
GDP by Country

USA 32.9% 4.65% Japan 13.4% 2.09% Germany 6.0% 1.36% Britain 4.6% 0.99% France 4.2% 0.97% China 3.7% 20.84% Italy 3.5% 0.95% Canada 2.3% 0.51% Mexico 2.0% 1.62% Spain 1.9% 0.65%


ad