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MEASURING NATIONAL OUTPUT INCOME PowerPoint Presentation
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MEASURING NATIONAL OUTPUT INCOME

MEASURING NATIONAL OUTPUT INCOME

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MEASURING NATIONAL OUTPUT INCOME

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  1. MEASURING NATIONAL OUTPUT INCOME WHAT IS NATIONAL INCOME ? NATIONAL INCOME (ALSO REFERRED TO AS NET NATIONAL PRODUCT) MAY BE DEFINED AS “A MEASURE OF THE MONEY VALUE OF THE TOTAL FLOW OF GOODS AND SERVICES PRODUCED IN AN ECONOMY OVER A SPECIFIED PERIOD OF TIME”.

  2. NATIONAL INCOME CONSISTS OF THE FOLLOWING • WAGE OR SALARY – THOSE GENERATED BY LABOR • INTEREST- THOSE GENERATED BY LENDERS OF FUNDS • RENT- THOSE GENERATED BY OWNERS OF REAL STATE • PROFIT-THOSE GENERATED BY THE ENTREPRENEURS • NET FACTOR-INCOME FROM ABROAD

  3. IMPORTANT TERMS USED IN MEASURING NATIONAL INCOME • GROSS DOMESTIC PRODUCT(GDP) • GROSS NATIONAL PRODUCT(GNP) • MARKET VALUE • VALUE ADDED • CONSUMPTION • INVESTMENT • CONSUMER DURABLES • GOVERNMENT EXPENDITURES • NET FACTOR INCOME FROM ABROAD

  4. GROSS DOMESTIC PRODUCT • THE GDP IS A MEASURE OF THE TOTAL FLOW OF GOODS AND THE SERVICES PRODUCED BY THE ECONOMY OVER A PARTICULAR TIME PERIOD.

  5. GROSS NATIONAL PRODUCT • THE GNP IS A MEASURE OF THE MARKET VALUE OF THE FINAL GOODS AND SERVICES PRODUSED BY NATIONALS OR CITIZENS OF A COUNTRY IN A PARTICULAR TIME PERIOD. • NONPRODUCTIVE TRANSACTIONS CONSIST OF THE FOLLOWING: • PURELY FINANCIAL TRANSACTIONS AND • SECONDHAND SALES. • PURELY FINANCIAL TRANSACTIONS CONSIST OF THE FOLLOWING : • PUBLIC TRANSFER PAYMENTS • PRIVATE TRANSFER PAYMENTS • BUYING AND SELLING OF SECURETIES.

  6. THE DIFFERENCE BETWEEN GDP AND GNP GROSS DOMESTIC PRODUCT GROSS NATIONAL PRODUCT

  7. MARKET VALUE • MARKET VALUE REFERS TO THE CURRENT PRICE OF GOODS AND SERVICES PRODUSED IN THE ECONOMY.

  8. VALUE ADDED • VALUE ADDED REFERS TO “THE DIFFERENCE BETWEEN THE VALUE OF GOODS PRODUSED ANG COST OF MATERIALS AND SUPPLIES USED IN PRODUCING THEM”.

  9. CONSUMPTION • CONSUMPTION REFFERS TO “EXPENDITURE BY CONSUMERS ON FINAL GOODS AND SERVICES”.

  10. INVESTMENT • INVESTMENT IS “AN ACTIVITY THAT USES RESOURCES NOW IN SUCH A WAY THAT THEY ALLOW FOR GREATER PRODUCTION IN THE FUTURE,AND,HENCE,GREATER CONSUMPTION IN THE FUTURE”. • TWO TYPES OF INVESTMENT • FIXED INVESTMENT • INVENTORY INVESMENT

  11. CONSUMER DURABLES • CONSUMER DURABLES ARE “CONSUMER GOODS, SUCH AS APPLIANCES AND FURNITURE, THAT USUALLY LAST FOR SEVERAL YEARS”.

  12. GOVERNMENT EXPENDITURES • GOVERNMENT EXPENDITURES REFER TO “THE SUM OF GOVERNMENT PAYROLLS AND PURCHACES, WHICH IS THE COST OF GOVERNMENT OUTPUT.

  13. NET FACTOR INCOME FROM ABROAD • THIS DEFFERENCE BETWEEN THE INCOME EARNED BY CITIZENS WHO OWN RESOURCES USED IN THE PRODUCTION PROCESS ABROAD AND THE INCOME OF FOREIGNERS WHO OWN RESOURCES USED IN THE PRODUCTION PROCESS HERE IN THE PHILPPINES.

  14. APPROACHES TO A NATIONAL INCOME ESTIMATION • INDUSTRIAL ORIGIN APPROACH(ALSO REFERRED TO AS VALUE ADDED APPROACH) • PRODUCT APPROACH (ALSO EXPENDITURE APPROACH) • INCOME APPROACH

  15. INDUSTRIAL ORIGIN APPROACH • AGRICULTURE,FISHERIES,AND FORESTRY • INDUSTRIAL SECTOR • SERVICE SECTOR

  16. PRODUCT APPROACH • THE PRODUCT APPROACH, ALSO REFERRED TO AS THE EXPENDITURE APPROACH,IS ALSO WAY OF ESTIMATING NATIONAL INCOME. IT INVOLVES CALCULATING THE SUM OF ALL EXPENDITURES ON FINAL GOODS.

  17. INCOME APPROACH • CURRENT PRODUCTION IS MADE POSSIBLE THROUGH THE USED OF ECONOMIC RESOURCES OF LAND,LABOR, CAPITAL ENTREPRENEURSHIP. THE OWNER OF THIS RESOURCES RECEIVE EARNINGS IN THE FORM OF RENT, WAGES AND SALARIES,INTEREST AND DIVIDENDS, AND PROFIT.