Gross Domestic Product

Topics: Gross domestic product, Measures of national income and output, National accounts Pages: 3 (359 words) Published: March 24, 2013
Lecture Notes on Measuring the Economy
By: Melcah T. Pascua

National Income Accounting

The primary measure of the economy’s performance is its annual total output of goods and services or, as it is called, its aggregate output. Aggregate output is labeled Gross Domestic Product (GDP): the total market value of all final goods and services produced in a given year.

Three approaches of computing GDP.

1. The Expenditure Approach (Output Approach)

Personal Consumption Expenditure (C)……………… xxxxx Gross Private Domestic Investment (Ig)………….……. xxxxx Government Spending (G)………………………….……… xxxxx Net Exports (Xn)………………………………………….…..…. xxxxx

Gross Domestic Product ………………………………… xxxxxxx

(C + Ig + G + Xn)

2. The Income Approach (Allocation or Earnings Approach)

Compensation of Employees…………………….…………. xxxxx Rents………………………………………………….……………….. xxxxx Interest……………………………………………..………………… xxxxx Proprietor’s Income…………………………..………………… xxxxx Corporate Profits………………………………………………. xxxxx

Corporate Income Taxes…………… . xxxxx
Dividends………………………………….. xxxxx
Undistributed Corporate Profits…. xxxxx

National Income………………………………………………….. xxxxx

Indirect Business Taxes……………………….……………….. xxxxx Consumption of Fixed Capital………………………………. xxxxx Net Foreign Factor Income
Earned in home country……………….…………. xxxxx

Gross Domestic Product …………………………………. xxxxx

3. The Industry-Origin Approach (Value-Added Approach)

Agriculture, hunting, forestry, and fishing…….…….. xxxx Agriculture and forestry……………………. ………….xxxx Fishing……………………………………………………..…… xxxx

Industry………………………………………….….…………….. xxxx  Mining and quarrying…………………………………. xxxx Manufacturing……………………….……………………. xxxx Construction…………………………….…………………. xxxx Electricity, gas, and water………………….……….. xxxx

Service sector……………………………………..………………. xxxx Transport, storage …………………….………………. xxxx Trade and repair of motor vehicles, 
motorcycles, personal and household
goods and...
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