1 / 11

Understanding Economic Performance and Value Added Concepts

Learn about measuring economic performance through GDP, GNP, value added, and more. Explore methods of calculating GDP and its components like NDP, NI, NX, DI, and understand the difference between real and nominal GDP.

cwen
Télécharger la présentation

Understanding Economic Performance and Value Added Concepts

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Measuring Economic Performance

  2. The market value of the final goods and services produced by workers and other resources located within the border of a nation over period of one year the market value of final output produced annually by all labour and property supplied by a nation’s households, no matter where those resources are employed GDP x GNP

  3. the market value of nation’s final output based on current prices for the goods and services produced during the year an estimate of the value of a nation’s final products based on prices of certain base year Nominal GDP x Real GDP

  4. Intermediate Products and Value Added • Intermediate products – products produced by business firms for resale by other firms or for use as materials or services that will be included in the value of resold good • VALUE ADDED = the extra worth that a business firm adds to intermediate products, it is measured by the difference between the market value of a firm’s sales, and the market value of the intermediate products that the firm purchases • Total value added = market value of - market value of in a nation (GDP) all products intermediate products

  5. Computing Value Added - example

  6. METHODS OF MEASURING GDP 1) Flow-of-Product Approach(The EXPANDITURE COMPONENTS OF GDP) 2) Earnings or cost approach (The INCOME SIDE OF GDP)

  7. From NNP to Disposable Income • Net National Product • Indirect business taxes and other adjustments • National Income - corporate profits - net interest paid -social security (payroll) taxes + government transfer payments + personal interest, dividends and other transfers • Personal Income - Personal taxes = Disposable income

  8. NET ECONOMIC WELFARE • GDP • Nonmarket production • The value of leisure time • The underground economy • Cost of enviromental damage

  9. Potential output Production-possibility frontier Y unattainable waste X

  10. Tasks:1. Based on following dates calculate: GDP, NDP, NI, NX, DI

  11. 2. Calculate nominal GDP, net investment and real GDP, assuming GDP deflator 116, C = 740, a = 21, G = 305, X = 194, M = 178, indirect taxes = 289, profits = 357, wages = 481, rents = 9, net interests = 18. 3. Calculate real and nominal GDP using following dates:

More Related