Unit Two: Find GDP and much more!

January 28, 2015

To find GDP add up market value on...

Expenditure Approach: (Most popular and Reliable)

C + IG + G + Xn = GDP

Income Approach: Add up all of the income earned by household and firms in a single year. (Unreliable)

GDP = W + R + I + P + Statistical Adjustments. 

W: wages

R: rents

I: interest

P: profit

SA (Statistical Adjustment): Whatever is left to equal the Expenditure approach when added up wages, rents, interest, and profits. 

Here are some formulas!

1. Budget: 

Government purchases of goods and services

+

Government transfer payments

-

Government tax and fee collection

If your number is Positive it is a deficit.

If your number is Negative it is a Surplus. 

2. Trade: 

Exports

-

Imports

If your number is Positive it is a Surplus.

If your number is Negative it is a Deficit. 

3. GNP: (Gross National Product)

GDP

-

Net foreign factor payments

4. NNP: (Net National Product)

GNP

-

Depreciation

5. NDP: (Net Domestic Product)

GDP

-

Depreciation

6. National Income:

Opt One:

GDP

-

Indirect business taxes

-

Depreciation

-

Net foreign factor payments

Opt Two:

Compensation of employees

+

Rental income

+

Interest income

+

Proprietors income

+

Corporate profit.

7. Disposable Personal Income:

Nat'l income

-

Personal household taxes

+

Gov't transfer payments