national income accounting
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National Income AccountingTRANSCRIPT
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National-Income Accounting
Prepared by: Akash gupta 188Dewang chauhan 203alankar das 190
Pankaj chhokar 147shikha rai 161
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Measuring the Economy
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Measures of Output3
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Gross Domestic Product (GDP)
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GDP Versus GNP5
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GDP per Capita6
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Measurement Problems7
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Value Added8
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Value Added9
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Value Added in Various Stages of Production
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Stages of ProductionValue of
TransactionsValue Added
1. Farmer grows wheat, sells it to miller $0.12 $0.12
2. Miller converts wheat to flour, sells it to baker
0.28 0.16
3. Baker bakes bagel, sells it to bagel store 0.60 0.32
4. Bagel store sells bagel to consumer 0.75 0.15
Total $1.75 $0.75
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Two Ways to Calculate GDP11
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Real Versus Nominal GDP12
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Computing Real GDP13
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Computing Real GDP14
nominal GDP in year Real GDP in year
price index
tt
100 price index
100
percentage change
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Net Domestic Product15
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Net Domestic Product16
–NDP GDP depreciation
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Net Domestic Product17
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Net Domestic Product18
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Net Domestic Product19
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The Uses of Output20
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Consumption21
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Investment22
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Government Spending23
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Net Exports24
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GDP Components25
–GDP C I G X M
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Measures of Income26
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Output = Income27
Wages
Productmarket
Consumer spending
Investment spending
Government spending
Net exportsProfits
Interest
Rent
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The Equivalence of Expenditure and Income (In billions of dollars)
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Expenditure Income C:Consumer goods and
servicesWages and salaries $8,062
$10,057 Corporate profits 1,092 I:Investment in plant,
equipment, and inventory
Proprietors’ income 1,072 Rents 64
1,994 Interest 929 G:Government goods
and services Taxes on output and imports 1,034
2,882 Depreciation 1,832 X:Exports 1,859 Miscellaneous 46 M:Imports (2,529) Statistical discrepancy 136
GDP:Total value of output $14,265 = Total value of income $14,265
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National Income29
–NDP GDP depreciation
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Net Foreign Factor Income30
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National Income31
NI NDP net foreign factor income
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Personal Income32
PI NI indirect business taxes corporate profits
interest and misc payments
Social Security taxes
transfer payments capital income
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Indirect Business Taxes33
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Corporate Profits34
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Payroll Taxes and Transfers35
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Capital Income36
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Disposable Income37
– DI personal income personal taxes
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Disposable Income38
DI consumption saving
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The Flow of Income39
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Income and Expenditure40
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