Professional Documents
Culture Documents
Gross
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Qa
Pi
Qi
Ps
Qs
10
10
12
10
08
10
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Farmers
Rs. 100
Millers
Rs. 80
Bakers
Rs. 70
Shopkeepers
Rs. 50
Total
Rs. 300
Mr. Naveed (A real estate agent) sells a New Bungalow worth Rs. 35
million to a client and charges Rs. 1 million as commission.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Factors of
production
Labour, Land, Capital
and Enterprise
Consumers
Producers
Goods and Services
2 Sector model
Saving and Investment
Income (Y)
Consumers
Producers
Savings (S)
Investment (I)
Financial Sector
Income (Y)
Consumers
Consumption spending (C)
Savings (S)
Producers
Investment (I)
Taxes (T)
Taxes (T)
Government Sector
Direct transfers
Government
Spending (G)
Income (Y)
Consumers
Producers
Savings (S)
Investment (I)
Taxes (T)
Taxes (T)
Government Sector
Government
Spending (G)
Direct transfers
Imports
External Sector
Farmer (Oranges)
Juice seller
Transactions of Mr. A
Transactions of Mr. B
Wages paid
(Rs.200)
Oranges purchased
Taxes
(Rs.150) Wages
(Rs.150)
(Rs.500)
Rs.500
Taxes
(Rs.100)
Rs.500
Rs.1000
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Personal Income
Personal income is the income that
households and noncorporate businesses
receive.
Unlike national income, it excludes retained
earnings, which is income that corporations
have earned but have not paid out to their
owners.
In addition, it includes households interest
income and government transfers.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Consumption (C )
Investment (I )
Government Purchases (G )
Net Exports (NX )
Y = C + I + G + NX
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Consumption (C):
Investment (I):
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
GDP Deflator
The GDP deflator measures the current
level of prices relative to the level of
prices in the base year.
It tells us the rise in nominal GDP that is
attributable to a rise in prices rather
than a rise in the quantities produced.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
GDP Deflator
The GDP deflator is calculated as follows:
NominalGDP
GDPdeflator=
100
RealGDP
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
(NominalGDP20xx )
RealGDP20xx =
X 100
(GDPdeflator
20xx )
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Life
Expectancy
United States
$29,010
77 years
99%
J apan
24,070
80
99
Germany
21,260
77
99
Mexico
8,370
72
90
Brazil
6,480
67
84
Russia
4,370
67
99
Indonesia
3,490
65
85
China
3,130
70
83
India
1,670
63
53
Pakistan
1,560
64
41
Bangladesh
1,050
58
39
920
50
59
Nigeria
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Adult
Literacy
Summary
Because every transaction has a buyer and
a seller, the total expenditure in the
economy must equal the total income in
the economy.
Gross Domestic Product (GDP) measures
an economys total expenditure on newly
produced goods and services and the total
income earned from the production of
these goods and services.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Summary
GDP is the market value of all final goods
and services produced within a country
in a given period of time.
GDP is divided among four components
of expenditure: consumption, investment,
government purchases, and net exports.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.
Summary
Nominal GDP uses current prices to
value the economys production. Real
GDP uses constant base-year prices to
value the economys production of goods
and services.
The GDP deflator--calculated from the
ratio of nominal to real GDP--measures
the level of prices in the economy.
Harcourt, Inc. items and derived items copyright 2001 by Harcourt, Inc.