Subject: Economics Grade 9 - St. John de Brito ('14-'15) Ateneo de Davao High School GROUP 3

1. 9 de brito – Group 3
Gallentes, De Jesus, Sanchez, Cane, Santiago, Maranan, Colindres, Deomampo, Malate, Roble, Romo

2. Final Expenditure Approach
• The Economic sectors like household, government, business
firms, and foreign market have their own expenses, which are
significant in measuring the GNP
1) Government Expenditure (G)
2) Personal Expenditure (P)
3) Business Expenditure (B)
4) Net Export
5) Net Factor Income from Abroad (NFIA)
6) Statistical Discrepancy (SD)
Page 1

3. 1 GOVERNMENT expenditure
• Government expenditure is a term used to describe money that a government
spends. Expenditure occurs on every level of government, from local city
councils to federal organizations. There are several different types of
government expenditure, including the purchase and provision of goods and
services, investments, and money transfers.
Page 2

4. GOVERNMENT expenditure
BACK Page 3

5. 2 PERSONAL expenditure
• Personal consumption expenditures (PCE) is the primary measure of
consumer spending on goods and services in the U.S. economy. It accounts for
about two-thirds of domestic final spending, and thus it is the primary engine
that drives future economic growth.Thus, for example, it shows the portion of
spending that is accounted for by discretionary items, such as motor vehicles,
or the adjustments that consumers make to changes in prices, such as a sharp
run-up in gasoline prices.
Page 4

6. PERSONAL expenditure
BACK Page 5

7. 3 BUSINESS expenditure
• Any expenses incurred in the ordinary course
of business. Business expenses are deductible
and are always netted against business income.
Businessmen invest in fixed capitals like
machineries, buildings, office equipment,
changes in stocks and inventories. These are all
considered as business expenditure.
BACK Page 6

8. 4 NET export
• The exports and the imports are the main
determinants of this component.
• In order to determine the expenses incurred by the
foreign sector, the expenses in the export (X) are
deducted from the expenses in imports (M)
• It will be positive if the exports are higher than the
imports
BACK Page 7

9. 5 Net Factor Income from Abroad (NFIA)
• It shows the difference between the income of Filipino
workers abroad as factors of production and the income
of foreign working in our country as factors of
production.
•When the income of OFWs is higher than the foreign
workers, there is a positive result.
• If the foreign workers’ income is higher than the
OFWs’, there is a negative result.
BACK Page 8

10. 6 STATISTICAL discrepancy (SD)
•DISCREPANCY - a lack of compatibility or similarity
between two or more facts.
• The errors in measuring the GNP represents the
component.
• Any discrepancy that cannot be determined and the
components traced will be considered as a discrepancy.
Page 9

11. GNP= G + P + B + (X-M) + NFIA + SD
• If all the expenditures mentioned
above are put together, GNP will be
computed. The formula above will
be used for measuring the GNP.
• For example:
• G = 65 M pesos
• P = 173 M pesos
• B = 100 M pesos
• M = 10 M pesos
• X = 8 M pesos
• NFIA = 6 M pesos
• SD = 8 M pesos
GNP
= 65 + 173 + 100
+ ( 8-10 ) +
6 + 8
= Php 350 million
Page 10

12. Group Reaction & Reflection
Page 11
We believe that learning about the expenditures in our
economy is essential in our up-bringing as the youth of today
and the nation of tomorrow.
It teaches us that we need to be aware where our money is,
and when to use it.
In the future we can use this knowledge to benefit not only
ourselves but the company and its workers and also we
contribute in the Philippine’s economic development.