Study Guide

BBA 2311: Macroeconomics

Course OverviewTitle of the course: Macroeconomics Corse Code: BBA 2311Credit hour: 3 hours

Learning OutcomesUpon completion of the Macroeconomics course, you will be able to:

Learning Outcomes

distinguish macroeconomics from microeconomics

summarise benefits of studying macroeconomics.

describe the macroeconomics performance indicators.

describe the circular flow of national income

explain the methods of measuring national income and their limitations.

describe the various types of national income accounts.

explain the concepts of consumption, investment and saving

describe different measures and functions of money

define inflation and unemployment and their consequences in an economy

state how fiscal policy and monetary policies influence the economy

outline the concept of the trade-off between inflation and unemployment.

elaborate on policy tools that can effectively be used to control inflation or unemployment.

Timeframe

How long?

This course will take approximately 16 weeks of study time.

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Need help?

Help

For any kind help concerned with the course, consult with -1. The tutor at your study center

2. Professor Mostafa Azad KamalSchool of Business Bangladesh Open UniversityGazipur-1705.Mobile: 01911319248E-mail: mostafa_azad@yahoo.com

3. Mr. Mafuzur RahmanSchool of Business Bangladesh Open UniversityGazipur-1705Mobile:E-mail:

Assignments

Assignments

There are two Assignments in this course; each contributing 10 per cent to the total assessment of this course. Assignment questions and deadlines can be found in the semester study package.

Assessments

Assessments

Two types of assessment will be followed in this course -

Assignment 1 10 per centAssignment 2 10 per cent

Final Examination 80 per cent Total 100 per cent

For more details about the assessments, please program guidelines of the university. You may collect the samples of the Final Examination Question Paper from the concerned school of the university.

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Margin IconsWhile going through this course, you will notice the frequent use of margin icons. These serve to “signpost” a particular piece of text, a new task or change in question; they have been included to help you to find your way around the course modules.

A complete icon set is shown below. We suggest that you familiarise yourself with the icons and their meaning before starting your study.

Outcomes Time Terminology Study skills

Activity Assessment Assignment Case study

Group discussion Summary Help Reading

Note it! Audio Video

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Module 1Introduction to Macroeconomics, Macroeconomic

Performance Indicators and Understanding the National Income Accounts

Module descriptor

Macroeconomics is one of the two branches of economics. It deals with the general trends in the economy, whereas microeconomics deals with the economic behaviour of an individual entity. This module will cover the introductory concepts on macroeconomics, macroeconomic performance measurement and various national income accounts. You will learn how to measure the economic performance of a country. You will also know the different methods of national income accounting and their limitations.

Learning outcomes

Upon completion of this module you will be able to:

Outcomes

define macroeconomics

explain the macroeconomic performance indicators

compare performance of two economies

explain the different phases of business cycle

define different national income accounts

explain the methods of national income accounting and their limitations

identify the problems with national income accounting.

Module structure

Lesson ONE Introduction to Macroeconomics

Lesson TWO National Income Accounting

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Timeframe

How long?

This module will take maimum 2 weeks to complete.

Terminology

Terminology

Economics: The study of how individuals and societies choose to use scarce resources.

Macroeconomics Macroeconomics deals with the behavior of the econmy as a whole. It discusses the trends in the aggregate variales of an economy such as, growth in national income, iflation, unemployment, balance of payments, etc.

Business cycle Business cycle is the periodic fluctuations of an economy.

GDP Gross Dometic Product (GDP) is the total value of the goods and services produced within the geographical boundary of a country in a particular fiscal year.

GNP Gross National Product (GNP) is the total value of the goods and services produced by the resources owned by the citizens of a country in a particular fiscal year.

Per capita income Per capita income can be GDP per capita or GNP per capita. GDP per capita can be derived by dividing GDP by the population size of a country.

Readings

Reading

Principles of Macroeconomics by N. Gregory Mankiw (GM), 4th edition, India Edition

Economics by Paul A. Samuelson & William D. Nordhaus (SN), 12 th edition, Mc-Graw Hill Irwin.

Economics – Principles & Policy by William J. Baumol & Alan S. Blinder (BB), 6th edition, Dryden.

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Lesson ONEIntroduction to Macroeconomics

How long?

We expect that it will take you around 8–10 hours to work through this lesson.

What is economics?Economics is the study of how individuals and societies choose to use scarce resources that nature and previous generations have provided. Economics is a behavioural science that concerns the study of how people make choices.

There are four main reasons to study economics: to learn a way of thinking, to understand the society, to understand global affairs and to be an informed citizen (voter). Probably the most important reason for studying economics is to learn a particular way of thinking. Some basic questions on economics are:

1. What is produced and in what quantities?2. How are these goods and services produced?3. For whom are they produced?4. Who takes economic decisions and by what process?

In the process of studying economics, you will be aware of the fundamental problem from which economic questions stem: that human beings have limited resources but unlimited wants. When wants exceed the resources available to satisfy them, there is scarcity. Scarcity is prevalent. People want good health and long life, material comfort, security, physical and mental recreation, and knowledge. None of these wants is completely satisfied and everyone has some wants that remain unsatisfied. However, it is safe to say that no one feels entirely satisfied with his/her state of health and expected length of life. Furthermore, no one has enough time for sports, travel, vacation, movies, theatre, reading and other leisure pursuits.

Audio

Reference no. (if on cellphone or CD or web):Date of broadcast:Time of broadcast:

Study skills

Economics is the study of how—A. Scarce resources are used to satisfy unlimited wants.B. We choose to use unlimited resources.C. Limitless resources are used to satisfy scarce wants.D. Society has no choice.

Solution:A. Economics is about choice—how we allocate limited resources to unlimited wants.

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Macroeconomics versus Microeconomics

Macroeconomics is concerned with the economy as a whole. Thus it is concerned with aggregate demand and aggregate supply. Aggregate demand accounts for the total amount of spending in the economy, by consumers, overseas customers for our exports, the government or firms when they buy capital equipment or stock up on raw materials. On the other hand, aggregate supply accounts for the total national output of goods and services. The overall economic question is measured in a variety of ways. These measurements – the number of people with jobs, the total income of persons, the output of factories, and the amount of total goods and services produced in the economy (GDP) are regularly reported in newspapers, business periodicals, news through television and radio. These reports often fail to explain the importance of these as well as other economic indicators. A business manager should be able to put these announcements in perspective with regard to both the relationships among indicators and the manager’s own business.

Microeconomics is concerned with the individual parts of the economy. It is concerned with the demand and supply of particular goods, services and resources such as cars, clothes and haircuts; electricians, secretaries, blast furnaces, computers and coal. The most basic economic forces a firm has to address are those that shape the supply and demand for the goods or services it produces. Even as businesses around the world are undergoing massive management changes, it is increasingly recognised that changing market conditions provoke these responses. The crux of microeconomic influences on business decision-making is the answer to the two-part question: How much should the firm produce, and how much should it charge for this output?

Study skills

Which of the following is true?

A. Microeconomics studies consumer behaviour, while macroeconomics studies producer behaviour.

B. Microeconomics studies producer behaviour, while macroeconomics studies consumer behaviour.

C. Microeconomics studies behaviour of individual households and firms, while macroeconomics studies national aggregates.

D. Microeconomics studies inflation and opportunity costs, while macroeconomics studies unemployment and sunk costs.

Solution:C. Microeconomics studies the behaviour of individual decision-makers, firms and households,

whereas macroeconomics studies aggregate concepts, inflation , unemployment, interest rates, exchange rates, etc..

Why People Study Macroeconomics?

People study macroeconomics for the following reasons:

1. Curiosity- people want to figure out how what we observe happens and there are two major questions people seeks answers for:

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What causes the economy to grow over time? (as we want to know what factors will make people permanently better off).

What causes the economy to experience fluctuations? (as we want to understand why there are fluctuations in output produced, the number of people unemployed, and the rate of inflation). In addressing these two fundamental questions we need to answer questions such as:

What causes inflation? What causes unemployment? What affect does inflation have on economic activity? What affect does a government budget deficit have on economic activity? How do a country’s international links affect economic activity? and there a whole host to such questions that need answering in order to answer the two

major questions.

2. To Become Educated- the Oxford Concise English Dictionary defined this as “the development of character or mental powers” which is very different from being trained which is “to teach a person a specified skill by practice”. Universities teach academic subjects (“abstract, theoretical, not of practical relevance”) and concentrate on educating students where as polytechnics teach vocational subjects (“directed at a particular occupation and its skills”) and concentrate on training students. Economics is first and foremost and academic subject although studying it also happens to teach good quantitative (working with numerical information) and analytical (examining and understanding structures or systems) skills which are valuable in many areas of employment.

3. Employment- Employment can be gained directly through the education and knowledge received at university eg. if we understand how economies work we can do better in life than if we don’t understand how they work. If employers think this subject, and the skills taught, are useful for the jobs they want filled they it will increase our chances of gaining employment. The completion of university study and relatively good performance are also used by employers and signals of a student’s capabilities regardless of what the students studies.

Why Macroeconomics is different from Microeconomics? – The issue of Aggregation

Although the approaches to developing an economic understanding of society is generic in nature, an obvious question to ask is what makes macroeconomics different from microeconomics since they both just involve studying economic behaviour of people? Recall that microeconomics is the study of the decisions made by firms and households, and how these decision makers interact in the marketplace. Macroeconomics is the study of the decision made by all firms and households, and the interactions of these decision makers in all markets. Furthermore, when studying a single market we invoke the ceteris paribus assumption but in macroeconomics this is no longer true since we are studying all markets at the same time. So macroeconomics is different because of the sheer scale, all markets are aggregated together, and because the general effects of any changes in behaviour have to be taken into account, rather than just analysing economic decisions in isolation from each other.

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Study skills

Identify whether the underlined variables are macroeconomic and microeconomic variables in the following news story:In Bangladesh, the prices of rice, edible oil, flour, etc. have been increased in recent years. In response, government took many steps to keep the prices of the necessary goods low. As a result, we found the inflation rate of the country in the recent years were not so high. Due to the high prices of the necessary commodities, people can’t save much and hence the national saving is not increasing significantly. To ensure higher growth of GDP, government is taking different positive steps. Firms are encouraged to produce more through enhancing the productivity. The balance of payment situation of the country is relatively better. Unemployment rate is almost stable.

Indicators Measuring Macroeconomic Performance

1. Per capital income: Per capita income means how much each individual receives, in monetary terms, of the yearly income that is generated in their country through productive activities. That is what each citizen would receive if the yearly income generated by a country from its productive activities were divided equally among everyone. Per capital income is usually reported in units of currency per year.

2. Inflation rate: Inflation is a rise in the general level of prices over time. It may also refer to a rise in the prices of a specific set of goods or services. In either case, it is measured as the percentage rate of change of a price index (e.g., Consumer Price Index-CPI).

3. Unemployment rate: Unemployment is the state in which a person is without work, available to work, and is currently seeking work. The unemployment rate is determined by dividing the number of unemployed workers by the total civilian labor force.

4. Growth rate: Economic growth is the increase in value of the goods and services produced by an economy. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP. As economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure. As an area of study, economic growth is generally distinguished from development economics. The former is primarily the study of how rich countries can advance their economies. The latter is the study of how poor countries can catch up with rich ones.

5. Balance of payments: Balance of payments (or BOP) measures the payments that flow between any individual country and all other countries. It is used to summarize all international economic transactions for that country during a specific time period, usually a year. The BOP is determined by the country’s exports and imports of goods, services, and financial capital, as well as financial transfers. It reflects all payments and liabilities to foreigners (debits) and all payments and obligations received from foreigners (credits). Balance of payments is one of the major indicators of a country’s status in international trade, with net capital outflow. according to IMF, “The balance of payments is a statistical statement that summarizes transactions between residents and nonresidents during a period.” The balance of payments comprises the current account, the capital account, and the financial account. Together, these accounts balance in the sense that the sum of the entries is conceptually zero.

6. Exchange rate: Exchange rate (also known as the foreign-exchange rate, for EX rate or FX rate) between two currencies specifies how much one currency is worth in terms of the other. For example an exchange rate of 2 Japanese yen (JPY, ¥) to the Bangladeshi Taka (Tk.) means that JPY 2 is worth the same as Tk.1.

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Video

Reference no. (if on cellphone or CD or web):

Date of broadcast:

Time of broadcast:

Study skills

Which of the following country is better off in terms of economic performance? Which country holds a better status in international trade?

Indicators Country A (Rupee.) Country B (Taka)Per Capital GDP $ 1000 $ 500Inflation rate 5% 8%Balance of Payments - $ 100 million + $ 10 millionExchange rate $ 1 = 40 Rupees $ 1 = Tk.70Unemployment rate 10% 20%Economic growth 9% 5%

Solution: In terms of overall performance, Country-A is in better position though Country-B is better off in international transactions.

The Business Cycle

A business cycle is the periodic but irregular up-and-down behaviour of total production and other measures of an economy. Business cycles have four phases, namely: expansion, peak, recession, and trough. The expansion phase is the period during which real GDP is increasing. A peak is the highest level of real GDP yet attained. A peak is a turning point between an expansion and a recession. After achieving a peak, real GDP usually turns into recession, that is, a period during which real GDP decreases for at least six months. Finally, a trough is the temporary low-point in real GDP and it is a turning point between a recession and an expansion.

1. Contractionary Phase occurs when the output growth rate is falling.

2. Expansionary Phase occurs when the output growth rate is increasing.

3. Trough is the point at which output growth is at its lowest during a business cycle. This is

the turning point between the contractionary and expansionary phases.

4. Peak is the point at which output growth is at its highest during a business cycle. The

turning point between the expansionary and contractionry phases.

5. Recessions occur when a decline in the real output, as measured by the fall in the GDP,

or negative real economic growth continues for two consecutive quarters.

6. Depression/Slump is a severe trough. A severe or long recession is referred to as an

economic depression. A devastating breakdown of an economy (essentially, a severe

depression, or a hyperinflation, depending on the circumstances) is called economic

collapse.

A recession is when your neighbor loses his job; a depression is when you lose your job.

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Study skills

Suppose, the growth rate of real GDP of a country is falling gradually for last 2 years. The unemployment rate has been increasing and many factories have already been shut off. This situation indicates which of following symptom:

A. The economy suffers from recession

B. The economy is booming

C. The economy in a recovery phase

D. More information is necessary to answer this question.

Solution:

A. As the real GDP falls for last 2 years gradually and unemployment rate is rising, this indicates that the economy is not in good condition. This is the symptom of recession.

Activity

Have a look on the macroeconomic indicator of Bangladesh from Fiscal Year 2002-2003 to Fiscal Year 2008-2009. Put the data on a table like below:

Years Real GDP growth rate

Inflation rate

Unemployment rate

Per capita income

Foreign exchange rate

Balance of payment deficit

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

A. Based on the above data, evaluate the performance of Bangladesh Economy during the specified time period.

B. Do you think that the economy suffered from any crisis during the specified period? Was it short-lived or long-term.

Group discussion

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Lesson TWONATIONAL INCOME ACCOUNTING

How long?

We expect that it will take you around 10–16 hours to work through this lesson.

Gross Domestic Product (GDP)A very common measure of the aggregate output of an economy is GDP. The total market value of

all final goods and services produced in the geographical boundary of the country in a given period

(usually a year) is called the GDP of the country in that period.

What to be included in GDP?

Only the value of final goods and services are included into GDP. It does not include inputs that are

used up in the production process.

Example: The petrol used by a taxi operator is not included in GDP, but petrol bought by a family

is included.

Why GDP does not include the petrol used by the taxi operator?

The price of petrol is included in taxi fare. If GDP includes the price of petrol sold to the taxi

operator and also include the taxi fare, the same thing will be included into GDP twice. On the

other hand, we do count the price of petrol sold to the family because the family uses it as final

good.

Nominal GDP versus Real GDP

Nominal GDP: It measures the market value of final goods and services produced using current

prices.

Read GDP: It measures the market value of the output of final goods and services produced using

prices of some base period.

An increase in real GDP results only from an increase in output produced

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GDP deflator

When comparing GDP between years, nominal GDP and real GDP capture different elements of

the change. Nominal GDP captures both changes in quantity and changes in prices. Real GDP, on

the other hand, captures only changes in quantity and is insensitive to the price level. Because of

this difference, after computing nominal GDP and real GDP a third useful statistic can be

computed. The GDP deflator is the ratio of nominal GDP to real GDP for a given year minus 1.

Nominal GDPGDP Deflator = ---------------------------- 100

Real GDP

Study skills

Suppose, in Country A, 2 products are produced – Wheat and Computers. In year-t, 10 tons of wheat

and 100 pieces of computers have been produced and prices of wheat and computer in the year-t

were Tk.10,000/Ton and Tk.20,000/Piece respectively. In year t+2, the country produces 10 tons of

wheat and 95 computers and the prices of wheat and computer in the year t+2 were Tk.12,000/Ton

and Tk.15,000/Piece respectively. Now with will be the GDP deflator of the compunry if year-t is the

base year?

Solution:

GDP per Capita

GDP per capita is the ratio between the GDP and the size of the population of the country.

GDPGDP per capita = -------------------------------------------

Population size

GDP is the single most useful number when describing the size and growth of a country’s

economy. An important thing to consider, though, is how GDP is connected with standard of living.

After all, to the citizens of a country, the economy itself is less important than the standard of living

that it provides.

GDP per capita gives the amount of GDP that each individual gets, on average, and thereby

provides an excellent measure of standard of living within an economy. Because GDP is equal to

national income, the value of GDP per capita is therefore the income of a representative individual.

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This number is connected directly to standard of living. In general, the higher GDP per capita in a

country, the higher the standard of living.

Audio

Reference no. (if on cellphone or CD or web):Date of broadcast:Time of broadcast:

Study skills

Suppose, in Country A, the population size is 120 million and GDP is 20 billion dollars in year 2006.

What will be the GDP per capita in year 2006?

Solution:

Measurement of Gross Domestic Product

The Expenditure Approach

In this approach, the GDP is measured by adding up the expenditures on the produced goods and

services within the country in particular time period. The following items must be noticed while

measuring GDP by expenditure approach:

The statistical discrepancy arises due to the different figures obtained for GDP from

using the expenditure approach and the factor incomes approach.

Investment includes:

(a) Purchase of capital equipment by firms.

(b) Expenditures on new residential houses by houses by households.

(c) Changes in inventories (stocks of raw materials, unfinished goods, or unsold

goods) by firms.

Government purchases do not include transfer payments.

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Factor Incomes Approach

In this approach, all incomes (wages, salaries, other labour income, corporate profits, interest,

other investment income, farmer’s income and the income of non-farm unincorporated businesses)

paid by the firm to households are added up to get GDP. This GDP is called GDP at factor cost.

If we adjust factor costs to get to market prices (since subsides to firms, and indirect taxes paid by

consumers create a wedge between factor incomes and market prices, we have to add indirect

taxes to, and subtract subsidies from, domestic income at factor cost), we get Net Domestic Product at market prices.

Output or Value Added Approach

This approach measures GDP by summing the value of output in each sector of the economy.

GDP is broken down into broad product categories eg. construction, agriculture. GDP then equals

the value added in each sector.

Value Added: is the value of firm’s output minus the value of intermediate goods bought from other

firms.

Final Goods: are goods consumed by the final user (either consumed all at once or over time if

investment goods).

Intermediate Goods: are goods which firms used in the production of other goods and services

(note they are not “consumed”, but “used”).

The value added also equals the sum of incomes paid to the factors of production used by a firms

to produce its output. We use value added to avoid double counting expenditure on both

intermediate and final goods.

How value added works?

Example: A load of bread

1. The farmer grows wheat by hiring labour, capital equipment, and land, and paying wages,

interest, and rent, and receiving a profit.

2. The entire value of the wheat produced is the farmer’s value added.

3. The miller buys the wheat from the farmer and turns it into flour.

4. The miller hires labour and capital equipment to do so, and pays them wages, interest,

and retains a profit.

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5. The value added by the miller is the differences between the price of the flour paid by the

baker, and the price the miller paid for the wheat.

6. Finally, the consumer buys a loaf of bread from the grocer and the purchase price is the

some of the value added of the farmer, the miller, the baker, and the grocer. In practice,

the value added of all final goods and services is added together, which gives us the

output measure of GDP.

Weaknesses of GDP Measurement: Is it a Good Measure of Welfare?

1) Measures only output that is traded in markets.

Restaurant meals are included in GDP, but meals made at home and homecare of children are not

included in GDP.

2) Does not include illegal activities.

Drugs, smuggling rare objects, some forms of gambling, and the black market. These are final

goods and services consumed by people, even if they are illegal.

3) Does not include pollution, or other externalities.

Effects of acid rain, water pollution, or smong. Each of these factors either directly lowers our

welfare now, or is “negative production” in the sense that part of our environment has been

destroyed.

4) Does not include the value of leisure to people

If a person works, this contributes to GDP, but if the person decides to choose leisure, then it is not

counted in GDP even though increased leisure does make us better off!

5) GDP misses out or mislabels some forms of investment.

Human capital is an important part of our capital stock, but investments in it (education, training)

are not necessarily included, or may not be included in the appropriate category.

Some consumption items, such as government spending, may be capital items. These items

directly add to our productive capacity and potential for increases in welfare in the future, but are

not accounted for by GDP as it is measured.

6) It is a flow measure, so it is not an accurate indicator of our productive capacity. If an

earthquake wiped out Dhaka EPZ we would lose a large part of our capital stock, and

therefore be less productive in the future even though Bangladesh’s GDP would likely

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increase as people and firms rebuilt what had previously existed, and we would definitely

not be better off than before the earthquake.

Video

Reference no. (if on cellphone or CD or web):

Date of broadcast:

Time of broadcast:

Gross National Product (GNP)

The total value of the goods and services produced by the factors of production owned by the

citizens of a country in a fiscal year is called the GNP of that country in that year. Here ownership

of the factors of production matters. If someone from Bangladesh works in Singapore, that person’s

income will be a part of the GNP of Bangladesh.

GDP versus GNP

GDP is just one way of measuring the total output of an economy. Gross National Product, or GNP,

is another method. GDP, as said earlier, is the sum value of all goods and services produced within a country. GN narrows this definition a bit: it is the sum value of all goods and services produced

by permanent residents of a country regardless of their location. The important distinction between

GDP and GNP rests on differences in counting production by foreigners in a country and nationals outside of a country. For the GDP of a particular country, production by foreigners within that

country is counted and production by nationals outside of that country is not counted. For GNP,

production by foreigners within a particular country is not counted and production by nationals

outside of that country is counted. Thus, while GDP is the value of goods and services produced

within a country, GNP is the value of goods and services produced by citizens of a country.

Essentially, GDP = GNP – NFP (net factor payments).

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Study skills

Suppose, in Country A, 2 products are produced – Wheat and Computers. Wheat is produced by

nationals and computers are produced by foreigners. If, in year-t, 10 tons of wheat and 100 pieces of

computers have been produced and prices of wheat and computer were Tk.10,000/Ton and

Tk.20,000/Piece respectively, what will be the GDP and GNP of the country?

Solution:

Relationship among GNP, GDP, NNP, PI, PDIGDP = Value added (Production – Intermediate consumption)

+ Taxes+ Duties

GNP = GDP+ Income receipts from the rest of the world– Income payments to the rest of the world

Net National Product (NNP) =

GNP– Consumption of fixed capital

National Income (NI) =

GNP– Statistical discrepancy

Personal Income (PI) =

NI– Corporate profits with inventory valuation and capital consumption

adjustments– Taxes on production and imports less subsidies– Contributions for government social insurance– Net interest and miscellaneous payments on assets– Business current transfer payments (net)– Current surplus of government enterprises– Wage accruals less disbursements+ Personal income receipts on assets+ Personal current transfer receipts

Personal Disposable Income (PDI) =

PI– Personal taxes

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Activity

Have a look on the operators below. Their place of operation and the country of origin are not the same. Based on the following information, identify the output of what operator belongs to the GDP and GNP of which country.

Operators/companies Place of operation

Country of origin Part of GDP Part of GNP

Banglalink Bangladesh EgyptGrameenphone Bangladesh BangladeshSinger Bangladesh USAHyundai Cement Bangladesh KoreaLever brothers Bangladesh UKBata Singapore USAALICO Bangladesh USA

Module Summary

Summary

In this module, you learnt the definition of macroeconomics. You have also captured the tools to be used for measuring the economic performance of a country. You also learnt about the business cycle and its phases.

In lesson TWO, you learnt different measures of national income. You also learnt how to distinguish GDP from GNP. The weaknesses of GDP measurement has also been browsed in this lesson.

Assignment

Assignment

Calculate the GDP, NDP, GNP and NI from the data below:

1) Personal Consumption Expenditure – Tk.14912) Transfer Payments – Tk.2743) Depreciation – Tk.2344) Retained earnings – Tk.1125) Gross Fixed Investment – Tk.3786) Fed. State Local Govts Purchases – Tk.3547) Changes in Bus. Inventories – Tk.268) Interest Paid To Institutions – Tk.1769) Imports – Tk.24810) Export – Tk.26111) Personal Income Taxes – Tk.51412) Indirect Bus. Taxes – Tk.17713) Net Factor Income from abroad-minus – Tk.514) Corp. Profit Taxes – Tk.11015) Social security contributions – Tk.95

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