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# National Income Accounting

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National Income Accounting

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### National Income Accounting

1. 1. National-IncomeAccountingPrepared by:Akash gupta 188Dewang chauhan 203alankar das 190Pankaj chhokar 147shikha rai 1611
2. 2. Measuring the Economy2
3. 3. Measures of Output3
4. 4. Gross Domestic Product (GDP)4
5. 5. GDP Versus GNP5
6. 6. GDP per Capita6
7. 7. Measurement Problems7
10. 10. Value Added in Various Stagesof Production10Stages of ProductionValue ofTransactionsValueAdded1.  Farmer grows wheat, sells it to miller \$0.12 \$0.122.  Miller converts wheat to flour, sells it to baker 0.28 0.163.  Baker bakes bagel, sells it to bagel store 0.60 0.324.  Bagel store sells bagel to consumer 0.75 0.15Total \$1.75 \$0.75
11. 11. Two Ways to Calculate GDP11
12. 12. Real Versus Nominal GDP12
13. 13. Computing Real GDP13
14. 14. Computing Real GDP14nominal GDP in yearReal GDP in yearprice indextt =100price index100percentage change+=
15. 15. Net Domestic Product15
16. 16. Net Domestic Product16–NDP GDP depreciation=
17. 17. Net Domestic Product17
18. 18. Net Domestic Product18
19. 19. Net Domestic Product19
20. 20. The Uses of Output20
21. 21. Consumption21
22. 22. Investment22
23. 23. Government Spending23
24. 24. Net Exports24
25. 25. GDP Components25( )–GDP C I G X M= + + +
26. 26. Measures of Income26
27. 27. Output = Income27WagesProductmarketConsumer spendingInvestment spendingGovernment spendingNet exportsProfitsInterestRent
28. 28. The Equivalence of Expenditure andIncome(In billions of dollars)28Expenditure IncomeC:Consumer goods andservicesWages and salaries \$8,062\$10,057 Corporate profits 1,092I:Investment in plant,equipment, andinventoryProprietors’ income 1,072Rents 641,994 Interest 929G:Government goodsand servicesTaxes on output and imports 1,0342,882 Depreciation 1,832X:Exports 1,859 Miscellaneous 46M:Imports (2,529) Statistical discrepancy 136GDP:Total value of output \$14,265 = Total value of income \$14,265
29. 29. National Income29–NDP GDP depreciation=
30. 30. Net Foreign Factor Income30
31. 31. National Income31NI NDP net foreign factor income= +
32. 32. Personal Income32PI NI indirect business taxes corporate profitsinterest and misc paymentsSocial Security taxestransfer payments capital income= − −−−+ +