Explain How Trends in the National Income Accounts Help Us to Understand the Country’s Economic Performance in Recent Years

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Explain how trends in the national income accounts help us to understand the country’s economic performance in recent years?

Introduction

National Income (Current Market Prices) €m
Gross Product20072008200920101
GDP - Value189,933179,990160,596155,992
GNP - Value163,413154,673132,233128,207
GNI - Value164,621155,986133,592129,301
1Preliminary
Source: CSO

National Income (Current Market Prices) €m
Gross Product20072008200920101
GDP - per capita43,77340,70236,01434,892
GNP - per capita37,66134,97729,65328,677
GNI - per capita37,94035,27429,95828,922
1Preliminary
Source: CSO

The National Income Accounts are used to measure how much spending, income and output is being created in an economy over a period of time and they measure three things: 1.Output: The money value of the flow of output of goods and services produced within an economy over a period of time. 2.Spending: The total amount of expenditure taking place in the economy. 3.Incomes: The total income generated through production of goods and services. Measuring the level and rate of growth of National Income (referred to as Y for short) is important to economists when they are considering: Economic Growth

Inflation
Employment/Unemployment
Public Finances
The three areas I will focus on in this assignment are Economic Growth, Inflation and Unemployment.

Economic Growth

2011 is an ESRI estimate and 2012 is a forecast.

“Gross Domestic Product (GDP) is the measure of the total income of a nation. This measurement includes both total income of everyone in the economy and the total expenditure on an economy’s output of goods and services.” An important point is that our GDP includes the output of foreign owned businesses that are located in Ireland following foreign direct investment in the Irish economy.

We exclude from the accounts the following items:
Transfer payments e.g. The...
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