ECON DEVT AND NAT INCOME ACCNTG

• ECONOMICS – study of how individuals and society generally make choices that involves the use of scarce resources among the alternative wants that need to be satisfied.
• Economics - deals with scarcity
• 4 Resources of economics

  -          Labor

  -          Capital

  -          Land

  -          Entrepreneur
• Market system – one means by which society allocate scarce resources and goods
• Market system is Divided into 2: microeconomics and macroeconomics
• Microeconomics

  - Considers the aggregate performance of all markets.
• what sectors concludes the open economy – household sector, business sectors, government sector, foreign sector
• what sectors ang wala sa closed economy na meron sa open economy – without foreign sector
• Inductive method – descriptive (gather data/facts) – economic theory – economic policy.
• Deductive method – theory – fact – policy
• Theoretical economics -involves economic theories by gathering, systematically, and generalizing facts.
• Good economics – theories are tested for validity against facts
• Policy economics – using economic laws and principle to formulate economic policies
• Government spending and taxation – fiscal policy
• Supply of money – monetary policy
• Normative – incorporates value judgement about what the economy should be like or what particular policy or actions should be recommended to achieve a desirable goal

  -          Your opinion, your idea
• Positive – focuses on facts and cause and effect
• what are the two ways of the effectiveness of economic policies can be assessed. Normative and Positive
• Development economics – is a branch of economics that focuses or examines economic development
• Economic development – all about improving living standards
• what are the core values of development? SUSTENANCE, SELF-ESTEEM, FREEDOM TO CHOSE
• -          The ability to meet the basic need (sustenance) – availability of food, shelter, security, and good health
• -          To be a person (self-esteem) – better standard of living and  quality life for everyone
• -          To be able to chose (freedom for servitude) – equal opportunity in social, legal, cultural, etc.
• X > M – TRADE SURPLUS
• X<M – TRADE DEFICIT
• X = M = TRADE BALANCE
• AT CONSTANT – REAL GDP

  CURRENT PRICE – NOMINAL GDP
• Positive GR of GDP – implies that economy is expanding and said to be in boom or peak
• Negative GR of GDP – contracting and said to be in depression/ recession.
• what is the formula of computing GROWTH RATE? (Yc -Yl) Yl * 100%