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MEASUREMENT OF MACROECONOMICS VARIABLES - Coggle Diagram
MEASUREMENT OF MACROECONOMICS VARIABLES
GROSS DOMESTIC PRODUCT(GDP)
measure of all currently produced final goods & services evaluated at market prices
the whole value of capital goods is included as a separate item.
CAPITAL GOODS
capital resources such as factories & machinery used to produce other goods
DEPPRECIATION
portion of the capital stock that wears out each year
EVALUATED AT MARKET PRICES
GDP is the value of goods & services determined by measuring rod of market prices
NOMINAL GDP
computing GDP in terms of current market prices
REAL GDP
the value of domestic product in terms of constant prices
CONSUMPTION
household sectors demand for output for current use.
INVESTMENT
part of GDP chased by business sector plus residential constuction
GOVERNMENT PURCHASES
goods & services that part of current output that goes to the government sector
NET EXPORT
total(gross) export minus imports
FORMULA:
GDP=C+I+G+(X-M)
DISTINCTION BETWEEN REAL & NOMIMAL GDP
GDP DEFLATOR= NOMINAL GDP/REAL GDP
REAL GDP=NOMINAL GDP/GDP DEFLATOR
NATIONAL INCOME ACCOUNTING IDENTITIES
T=Net taxes
Tx=taxes
Tr=government transfers
Y=income
Yd=disposable income
Yd=Y-T
T=Tx-Tr
Yd=Y-(Tx+Tr)
Y=C+I+G
yd=Y-T=C+S and Y=C+S+T
C+Ir+G=Y=C+S+T
CALCULATING GROSS DOMESTIC PRODUCT
INCOME APPROACH
THE PRODUCT OR OUTPUT APPROACH
EXPENDITURE APPROACH