national income accounting
DESCRIPTION
National Income AccountingTRANSCRIPT
National-Income Accounting
Prepared by: Akash gupta 188Dewang chauhan 203alankar das 190
Pankaj chhokar 147shikha rai 161
1
Measuring the Economy
2
Measures of Output3
Gross Domestic Product (GDP)
4
GDP Versus GNP5
GDP per Capita6
Measurement Problems7
Value Added8
Value Added9
Value Added in Various Stages of Production
10
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
Two Ways to Calculate GDP11
Real Versus Nominal GDP12
Computing Real GDP13
Computing Real GDP14
nominal GDP in year Real GDP in year
price index
tt
100 price index
100
percentage change
Net Domestic Product15
Net Domestic Product16
–NDP GDP depreciation
Net Domestic Product17
Net Domestic Product18
Net Domestic Product19
The Uses of Output20
Consumption21
Investment22
Government Spending23
Net Exports24
GDP Components25
–GDP C I G X M
Measures of Income26
Output = Income27
Wages
Productmarket
Consumer spending
Investment spending
Government spending
Net exportsProfits
Interest
Rent
The Equivalence of Expenditure and Income (In billions of dollars)
28
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
National Income29
–NDP GDP depreciation
Net Foreign Factor Income30
National Income31
NI NDP net foreign factor income
Personal Income32
PI NI indirect business taxes corporate profits
interest and misc payments
Social Security taxes
transfer payments capital income
Indirect Business Taxes33
Corporate Profits34
Payroll Taxes and Transfers35
Capital Income36
Disposable Income37
– DI personal income personal taxes
Disposable Income38
DI consumption saving
The Flow of Income39
Income and Expenditure40
41