All the three methods of national income accounting are explained with mathematical questions and answers. It is very helpful for the NCERT and SCERT plus two commerce and humanities students who have to learn these methods in the second chapter of macroeconomics.
All the three methods of national income accounting are explained with mathematical questions and answers. It is very helpful for the NCERT and SCERT plus two commerce and humanities students who have to learn these methods in the second chapter of macroeconomics.
1. Determination of National Income EDWARD BAHAW - Economic Principles and Their Application to Business (ABE) Chapter #10, 11
2. PRODUCERS Y = $40M CONSUMERS S = $6M S T = $4M M = $10M Factors of Production Goods and Services X = $7M G = $5M I = $8M C D = $20M Circular Flow of Income EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)
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5. Injections and Withdrawals Injections Withdrawals CIRCULAR FLOW OF INCOME EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)
6. Injections (J) and Withdrawals (W) C D = C T - M J = I + G + X W = S + T + M AE = C T + I + G + X – M EDWARD BAHAW - Economic Principles and Their Application to Business (ABE) Y C T I G X M S T C D J W AE 0 20 25 35 10 10 -20 0 10 70 -10 80 100 90 25 35 10 20 0 10 200 160 25 35 10 30 20 20 300 230 25 35 10 40 40 30 400 300 25 35 10 50 60 40
7. Equilibrium Level of National Income – Injections and Withdrawals Y W/J 200 W = S+T+M E J= X + G + I 70 EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)
8. Aggregate Expenditure Y AE 200 80 AE 1 100 300 140 200 260 EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)
9. Equilibrium Level of National Income – 45 Diagram Y AE E 1 45 200 Y=AE AE 1 200 EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)
10. National Income Equilibrium and Disequilibrium EDWARD BAHAW - Economic Principles and Their Application to Business (ABE) Condition W = J or Y = E W > J or E < Y J > W or E > Y Classification Equilibrium Disequilibrium Disequilibrium Effect Income is Stable Income Contracts Income Expands
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13. An Increase in Aggregate Expenditure EDWARD BAHAW - Economic Principles and Their Application to Business (ABE) Y AE E 1 45 200 Y=E 225 E 2 120 130 AE 2 AE 1
14. An Increase in Injections EDWARD BAHAW - Economic Principles and Their Application to Business (ABE) Y AE 200 W 225 E 1 E 2 J 1 = X + I + G 1 J 2 = X + I + G 2 80 70
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19. Inflationary Gap EDWARD BAHAW - Economic Principles and Their Application to Business (ABE) Y E X Y E AE 1 45 Y F Y=E Y E1 FE Output Gap
20. Deflationary Gap Y E F G E AE 2 45 Y F Y=E Y E2 FE Output Gap EDWARD BAHAW - Economic Principles and Their Application to Business (ABE)
