total production, income, and expenditure: the national accounts

total production = income = expenditure

GPD

approaches

defined as the total value of all final goods and services produced with in geographic boundaries

production method

income method

expenditure method

only added value

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final consumption expenditure.

gross capital formation

final consumption expenditure by house holds

final consumption expenditure by general government

fixed capital formation

changes in inventory

valuation at......

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subsidies

factor costs: the amount recevend by the various factors of production

indirect taxes: taxes on production

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basic prices

factor costs

market prices

Basic price +takes on products - subsidies on production

market prices - taxes on products + subsidies products

basic prices - other taxes on production + other subsidies on production

factor cost + all taxes on products and production - all subsidies

factor prices + other taxes on production - other subsidies on production

basic prices - other taxes on production + other subsidies on production

GDP at...

GDP at factor costs

gdp at basic prices

+other taxes on production - other subsidies on production = GDP at basic prices

+taxes on products - subsidies on products = GDP at market prices

valuation at current vs constant prices

the ratio between nominal GDP and real GDP is called the GDP deflator

Problems with GDP

unrecorded activity

GDP as a measure of welfare

non-market production

distribution of income

GNI

net primary income=primary income to the rest of the world - primary income from the rest of the world

GNI= GDP+primary income from the rest of the world- primary income to the rest of the world

GDE

GDE=C+I+G

GDP=C+I+G+X-Z

PLEASE REVIEW COUNTS

saving

gross saving consists of saving by house holds, corporate saving, saving of general government and consumption of fixed capital

net saving = gross saving - consumption of fixed capital

=income - expenditure