LESSON 4 NATIONAL ACCOUNTS

• Gross Domestic Product (GDP)


  Total market value of all final goods
• National Income Accounts


  Data collected and published by the government describing the various components of national income and output in the economy
• Final Goods and Services (Final G&S)


  Goods and services produced for final use
• Intermediate Goods


  Goods produced by one firm for use in further processing by another firm
• Value Added


  Difference between the value of goods as they leave a stage of production and the cost of the goods as they entered that stage
• Difference of GDP and GNP


  GDP is the value of output produced by factors of production located within a country. Output produced by a country's citizens, regardless of where the output is produced, is measured by gross national product (GNP)
• Approaches in Calculating GDP

  • Expenditure Approach
  • Income Approach
  • Value-added Approach
• Expenditure Approach


  Amount spent on all final goods during a given period, GDP = C + I + G (X - M)
• Income Approach


  Measures the income—wages, rents, interest, and profits—received by all factors of production in producing final goods
• Value-Added Approach


  Measures the amount of value added (from intermediary to final product/services) by industrial origin for a given period of time
• Nominal GDP


  Final market value of all goods and services produced by country's factors of production within a given period of time
• Real GDP


  Final market value of all goods and services produced by country's factors of production within a given period of time where the prices used are the base year prices
• Consumer Price Index


  Measures changes in the price level of the consumer's market (INFLATION) basket of goods and services purchased by households
• Producer Price Index


  Measures the average changes in the prices received by the domestic producers (sellers) of their goods and services produced in the market