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6 - Econ102 Lecture 1:22:00 PM Calculation of GPD in...

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Econ102 Lecture 06/02/2008 14:22:00 Calculation of GPD in practice The commerce department’s bureau of economic analysis (BEA) calculates  GDP in 3 different ways o Expenditure approach o Value Added approach o Factor payments approach In theory, they all measure the same thing The Expenditure Approach Almost direct application of formula Reason: o Value of all final goods and services= expenditures on goods and  services by all final users (les expenditures on imported goods!) Final users: households, businesses, government agencies, foreigners Comsumption Spending The part of GDP purchased by households as final users Largest component of GDP (70%) Includes estimations for o Food- self-produced and consumed o Rent- owner-occupied homes Excludes o Used goods o Assets (Stocks, bonds, land) o Newly constructed homes Private Investment Components
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