Lecture-3

Lecture-3 - Lecture 3: National Income Accounting Reference...

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Lecture 3: National Income Accounting Reference - Chapter 5 3) The Income Approach The income approach defines GDP in terms of the income derived or created from producing final goods and services. Net Domestic Income at factor cost = Wages, Salaries, and Supplementary Labour Income + Profits of Corporations and Govt. Enterprises before taxes + Interest and Investment Income + Net Income from Farms and Unincorporated Businesses + Taxes less subsidies on factors of production
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Net Domestic Income at market prices = Net Domestic Income at factor cost + Indirect taxes less subsidies Gross Domestic Product (GDP) at market prices = Net Domestic Income at market prices + Capital Consumption Allowances + Statistical Discrepancy OTHER NATIONAL ACCOUNTS Gross National Product (GNP) = Gross Domestic Product (GDP) + Net Investment from Non-residents = 1154.9 – 84.9 = 1070
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Example – The production of cars in the Honda factory in Alliston, Ontario is included in both Canadian GDP and GNP. But GNP excludes profit sent to foreign shareholders of Honda, but this profit is included in Canadian GDP. Net Domestic Product (NDP)
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This note was uploaded on 06/20/2009 for the course ECN 204 taught by Professor Unknown during the Spring '09 term at Ryerson.

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Lecture-3 - Lecture 3: National Income Accounting Reference...

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