Submitted by: Submitted by Deeeva
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Category: Business and Industry
Date Submitted: 12/21/2010 08:09 AM
System of National Accounts (SNA)
Key economic sectors
• NON_GOVERNMENT
– Households
• Supply land, labor and capital to various factor markets • Demand goods and services in the market for products • Decisions on consumption versus savings and investment on the financial markets
– Enterprises
• Make production and investment decision in order to maximize profit • Demand for land, labor and capital • Supply of goods and services
Key economic sectors
• GOVERNMENT
– Regulatory and legal framework – Providing public goods (non-rivalrous and nonexcludable) – Managing the tax system (revenues) and the expenditures
• FINANCIAL
– financial intermediation services for the economy supplied by the banking system and other financial institutions
• REST OF THE WORLD
– Transaction with the non residents
3 approaches of deriving GDP
Production/Supply approach • sum of sectoral gross value added in the economy • Output (value of production) – inputs in the production process (intermediate consumption)
– Gross -Usually used instead of the net concept
• Because of the difficulty of estimating the depreciation • More comparable among countries
– Domestic – only production by residents is captured
3 approaches of deriving GDP
Incomes approach • GDP (at market prices) = GDP (at factor costs) + TSP= W+OS+TSP
– W – wages and other remuneration of employees – OS – operating surpluses of firms (rents, interest, profits) – TSP – taxes less subsidies (sales taxes and other business taxes less subsidies)
3 approaches of deriving GDP
Expenditure approach • GDP = C+I+X-M
– C – final consumption of private and government sector – I – gross investment (fixed capital formation and changes in inventories) – X- Exports of goods and services – M- Imports of goods and services
Other macroeconomic aggregates
Gross National Income (GNI) • GNI = GDP +Yf
– Yf – net factor income from abroad
• GDP (measures final output produced by residents ignores...