National Income Determination Theory in Four Economic Sectors
1. Disusun Oleh :
KELOMPOK 5
1. Indra Andhika Putra NPM = 0913010074
2. Dwie Anggun Pribadi NPM = 1113010162
3. M. Yan Fatahillah NPM = 1113010179
4. Larasati Putri A. NPM = 1113010197
5. Sally Ruth Minar NPM = 1113010198
6. Rinita Arumsari NPM = 1113010203
7. Riska Nisa Maulani NPM = 1113010224
2. National Income Determination Theory Economy
Four Sectors (Chapter 5)
Economic activity there is a role abroad through exports and
imports.Exports and Imports is an activity between a country's
trade with other countries. Exports will increase foreign exchange
reserves,while imports can reduce a country's foreign exchange
reserves.Changes in foreign exchange reserves of a country will
affect a country's economic development.
Some of the factors determining exports as follows:
The competitiveness of the products of a country the international
market such as quality and price.
The economic conditions of countries that export mainly to the
recipient's purchasing power / income levels better,etc
Determinants of Imports as follows:
Price and exchange rates or foreign exchange curve.
Condition national product produced in the country.
Protection policies of importing countries.
3. A.DETERMINATION OF NATIONAL INCOME APPROACH
ANALYSIS (FOUR SECTORS ECONOMY)
There are two approaches in the analysis of determinants of national income the following four
sectors:
1.Income Approach is approach that sees the value of national income earned is determined by
the large consumption society, aggregate savings society, taxes, and import.
.In mathematical equation would look:
GNI => Y = C + S + Tx + M Y= National Income
C= Consumtion
S= Savings
Tx= Tax
M= Import
2.Expenditure Approach is an approach that sees the value of national income aggregate savings
can be determined by the amount of spending or aggregate expenditures (overall).In mathematical
equation would look:
GN => Y=C+I+(G+Tr)+X Y=The value of national product
C=Consumption
I=Investment
G=Government Expenditure
Tr=Government Transfer
X=Export
4. ECONOMIC BALANCE
ECONOMIC BALANCE
Four sectors of the economy is said to be in equilibrium if the value of
people's savings plus tax and plus imports as a major investment that
occurred in economic activity, plus government spending,and added
expor.In mathematical condition can be found as follows:
A. Income Approach Y = C + S + Tx + M
B. Expenditure Approach Y = C + I + ( G + Tr ) + X
Terms of economic balance four factors :
C + S + Tx + M = C + I + ( G –Tr ) + X
S + Tx + M = I + ( G + T r ) + X
5. B. THE BALANCE OF THE ECONOMY OF THE FOUR
SECTORS
Economic equilibrium will be reached when the aggregate supply (AS) is equal to aggregate
demand (AD). For the four sectors of economy,(AS) is the overall national product that is ready to
be offered to the public,while the (AD) is spending the whole community to ask the national
product consisting of C as an RTK sector spending,I as RTP sector spending, as spending RTN G,
and X as expenditures RTLN.
To analyze the condition of the economy can balance the two approaches:
Y = C + I + G + X
1. Income-Expenditure Approach, this approach to analyze the relationship between the
overall balance of the overall income of the people with public spending.Mathematical
relationship of income and public expenditure can be expressed as follows:
Y = C + I + G + X
There are three possible relations of income and expenses:
A.) Y = C + I + G + X = AD or AS
This means that the economy in a state of equilibrium. There is no accumulation of
the national product as sold out.
B.) Y> C + I + G + X or AS> AD
This means that equilibrium occurs,national income is greater than the public
expenditure for purchase of national products.
C.) Y <C + I + G + X or AS <AD
This means that disequilibrium occurs.National income is less than the public
expenditure for purchase of national products.
6. GRAPHIC IMAGE, THE BALANCE OF ECONOMIC ANALYSIS
INCOME EXPENDITURE APPROACH:
BEP = 1 sector balance
Y = C
E1 = 2 sector balance
Y = C + I
E2 = 3 sector balance
Y = C + I + G
E3 = 4 sector balance
Y = C + I + G + X
Image 5.1
a
I
X
G
C + I + G + X
YBEP
BEP
C + I + G
C + I
C = a + b Y
Y1 Y2 Y3
E1
E2
E3
Y
C, I, G, X
Scale line
7. THE BALANCE OF THE ECONOMY OF THE FOUR
SECTORS
2.Leaked-Injection Approach is the approach to
analyzing the connected between cash flow by injection of
cash flows that occur in the economy(saving,tax,import).
Injection flow of money in the form of (
investment,government expenditure ,exports).
There are three possible relations of income and expenses:
-If S + T + M = I + G + X => The Economy in a state of
balance
-If S+T+M<I+G+X=>The Economy is not balanced,
spending less cash flow than current cash injection.The
mean investment,government expenditure,and import
greater than the savings,tax revenue,and export.APBN will
deficit.
-If S+T+M>I+G+X=>The Economy is not
balanced.Spending money flows greater than the injection
of money.The mean investment,government
expenditure,and import smaller than saving,tax
revenue,and export.APBN will surplus.
8. GRAPHIC IMAGE, THE BALANCE OF ECONOMIC ANALYSIS
LEAKED-INJECTION APPROACH
I
-a
0
I
G
X
I + G
I + G + X
S = -a + ( 1 – b )Y
YE1
YBEP
YE2
YE3
Y
Image 5.2
S, I, G, X
E1=2 sector balance
S = I
E2 = 3 sector balance
S – T = I – G
E3 = 4 sector balance
S – T + M = I + G + X
9. C.Import Export influence of National Income and the
Multiplier Effect in Economy Four Sectors.
The existence of exports(X) and imports(M) in the
economy will affect Aggregate Demand(AD). For a
closed economy consisting of a variable Cyd AD + I +
G, whereas for an open economy grew variables into
Cyd AD + I + G + (X-M).
The value of exports is not always the same as the value
can be larger than impor.Ekspor impor.jika this occurs
when the trade balance has surplus.Tapi exports less
than imports, trade balance means having
equilibrium.