Bài giảng MicroEconomics - Chapter 024 Measuring Domestic Output and National Income

Measuring Domestic Output and National IncomeChapter 24McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter ObjectivesDefine and measure GDPGDP and income relationshipsThe GDP price indexNominal GDP vs. real GDPLimitations of the GDP measureBureau of Economic Analysis compiles National Income and Product AccountsAssess health of economyTrack long run courseFormulate policyNational Income AccountingGross Domestic ProductMeasure of aggregate outputMonetary measureAvoid multiple countingMarket value final goodsIgnore intermediate goodsCount value addedGross Domestic ProductExclude financial transactionsPublic transfer paymentsPrivate transfer paymentsStock (and bond) market transactionsSecond hand salesSell used car to a friendTwo Approaches to GDPIncome approachCount income derived from productionWages, rental income, interest income, profitExpenditure approachCount sum of money spent buying the final goodsWho buys the goods?GDP==+Consumption byHouseholdsInvestment byBusinessesGovernmentPurchasesExpendituresBy Foreigners+++++WagesRentsInterestProfitsStatisticalAdjustments+Two Approaches to GDPExpenditure ApproachPersonal consumption expenditures (C)Durable consumer goodsNondurable consumer goodsConsumer expenditures for servicesDomestic plus foreign producedExpenditure ApproachGross private domestic investment (I)Machinery, equipment, and toolsAll constructionChanges in inventoriesCreation of new capital assetNoninvestment transactionsExpenditure ApproachJanuary 1Year’s GDPDecember 31Consumption& GovernmentSpendingDepreciationNetInvestmentGrossInvestmentStock ofCapitalIncreaseStock ofCapitalGross InvestmentDepreciationNet Investment-=Expenditure ApproachGovernment purchases (G)Expenditures for goods and servicesExpenditures for social capitalExcludes transfer paymentsNet exports (Xn)Add exported goodsSubtract imported goodsNX = exports - importsGDP = C+Ig+G+XnCompensationRentsInterestProprietor’s IncomeCorporate ProfitsTaxes on Production and ImportsNational IncomeNet Foreign Factor Income (-)Statistical Discrepancy (+)Consumption of Fixed Capital (+)Gross Domestic Product$ 787465603104316271009 $12,22196291687$ 13,841Personal Consumption (C)Gross Private Domestic Investment (Ig)Government Purchases (G)Net Exports (Xn)Gross Domestic Productin Billions ReceiptsExpenditures ApproachAllocationsIncome Approach$ 973421252690-708$ 13,841U.S. Economy 2007Comparative GDPSource: World BankSelected Nations GDPs, 2007United StatesJapanGermanyChinaUnited KingdomFranceItalyCanadaSpainBrazilRussiaIndiaSouth KoreaMexicoAustralia0 1 2 3 4 5 6 7 8 9 10 12 13GDP in Trillions of DollarsComponents of National IncomeCompensation of employeesRentsInterestProprietor’s incomeCorporate profitsCorporate income taxesDividendsUndistributed corporate profitsTaxes on production and importsIncome ApproachFrom national income to GDPNet foreign factor incomeStatistical discrepancyConsumption of fixed capitalOther national accountsNet domestic product (NDP)National income (NI)Personal income (PI)Disposable income (DI)DI = C + SU.S. Income Relationships 2007Gross Domestic Product (GDP)Less: Consumption of Fixed CapitalEquals: Net Domestic Product (NDP)Less: Statistical DiscrepancyPlus: Net Foreign Factor IncomeEquals: National Income (NI)Less: Taxes on Production and ImportsLess: Social Security ContributionsLess: Corporate Income TaxesLess: Undistributed Corporate ProfitsPlus: Transfer PaymentsEquals: Personal Income (PI)Less: Personal TaxesEquals: Disposable Income (DI)$ 13,8411687$ 12,1542996$ 12,22110099794673442237$ 11,6591482$ 10,177Nominal vs. Real GDPGDP is a dollar measure of productionUsing dollar values creates problemsNominal GDPUse prevailing priceReal GDPReflect changes in priceUse base year priceGDP Price IndexUse price index to determine real GDPPriceIndexIn GivenYear=x100Price of Market BasketIn Specific YearPrice of Same BasketIn Base YearRealGDP=Nominal GDPPrice Index (in hundredths)Shortcomings of GDPNonmarket activitiesLeisureImproved product qualityThe underground economyGDP and the environmentComposition and distribution of the outputNoneconomic sources of well-beingUnderground EconomySource: Open Assessment, E-JournalAs a percentage of GDP, Selected Nations, 2007MexicoSouth KoreaIndiaItalySpainChinaSwedenGermanyFranceUnited KingdomJapanSwitzerlandUnited States0 5 10 15 20 25 30 Percentage of GDPSources of BEA DataConsumptionCensus Bureau’s Retail Trade SurveyCensus Bureau’s Survey of ManufacturersCensus Bureau’s Service SurveyInvestmentAll Consumption data sourcesCensus Bureau’s Housing Starts Survey and Housing Sales SurveyRetail Trade SurveyWholesale Trade SurveySurvey of ManufacturingGovernment PurchasesOffice of Personnel ManagementConstruction SurveysCensus Bureau’s Survey of Government FinanceNet ExportsU.S. Customs ServiceBEA Surveys and AnalysisSources of BEA DataKey Termsnational income accountinggross domestic productintermediate goodsfinal goodsmultiple countingvalue addedexpenditures approachincome approachpersonal consumption expendituresgross and net private domestic investment government purchasesnet exports taxes on production and importsnational incomeconsumption of fixed capitalnet domestic product personal income disposable incomenominal GDPreal GDPprice indexNext Chapter Preview Economic Growth