Lecture 11 National Accounts(1)

Lecture 11 National Accounts(1) - National Accounting What...

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National Accounting What are some important issues that any citizen should care about? The study of Macroeconomics is fundamentally about data: Key Variables: GDP, consumption, investment, import/export, employment, unemployment, inflation, wages, interest rates. Distinguish between stock and flow variables. National Accounting : a system to measure these data. In the U.S: NIPA (National Income and Product Accounts)
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Measuring Total Production Gross Domestic Product (GDP): The market value of all final (economic) goods and services produced in a country during a period of time, typically one year. GDP is measured using market values, not quantities. How do we measure the value of service? GDP only includes the market value of final goods (not intermediate goods). GDP includes only production that takes place during the indicated time period. GDP excludes free goods.
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Measuring Total Production Gross National Product (GNP): The market value of final goods and services produced by residents of the United States, even if the production takes place outside the United States. GDP vs. GNP: Location vs. Citizenship/Nationality GNP = GDP + NFP Net Factor Payments (NFP) are small in the U.S.
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Measuring Total Production Methods for Measuring GDP: 1) Expenditure Approach (Uses vs. Resources) 2) Value Added Approach (A discussion of VAT) 3) Income Approach (Induced Income)
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Measuring GDP: Expenditure GDP = C + I B + G + (X – M) Consumption (C): Spending by households on goods and services, not
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Lecture 11 National Accounts(1) - National Accounting What...

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