Compared with the expenditure approach to calculating GDP, the income approach?
The more parctible approach is civic forum run civic banks answering to constitutions of the world.
Compared with the expenditure approach to calculating GDP, the income approach is?
Compared with the expenditure approach to calculating GDP, the income approach is: b - more practical. because incomes accruing to diffenernt economic agents are rather easy to collect, compile and verify for internal consistency.
GDP calculation by sorting expenditures and income approaches?
GDP can be calculated with either the expenditure or income approach, and either method will give you the same answer if done correctly. Chances are, your table has the numbers needed for both approaches, and you need to sort through which numbers go with which approach. It is also possible that there are numbers in the table that you do not need, just to try to throw you off. The expenditure approach measures GDP by counting categories of how the money is spent. It is fairly easy to learn. You just have to know that GDP = personal consumption expenditures (consumption) plus investment expenditures (investment) plus government purchases of goods and services (government, and make sure you include only purchases and not transfer payments) plus net exports (total exports minus total imports). 'This is easy to remember: GDP = C + I + G + X The income approach is a little more involved. It may be harder for you to remember. It counts up the incomes earned by the different factors of production. It goes like this: GDP is equal to the sum of: compensation of employees (wages) net interest rental income proprietors' income corporate profits indirect business taxes and misc items depreciation The last one, depreciation, is the difference between GDP and NDP. Subtracting indirect business taxes and misc items from NDP will give you National Income.
Compare and contrast the income approach and expenditure approach used in calculating GDP?
In income approach GDP = Compensation of Employees + Rent + Interest + Profit + Mixed Income of Self employed. In Expenditure approach GDP = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Capital Formation. Income method uses Income as a parameter to measure GDP and Expenditure method uses expenditure as a parameter.
Of the following items, which would not be included in GDP?
A. the dollar value of a repair job done by your professor on his or her own car. B. the dollar value of a lawyer's service C. new car sales by a local car dealer D. the production of new cars that were not sold in the current year.
Comparing the expenditure and value-added approaches for calculating GDP?
The expenditure and value-added approaches for calculating GDP arrive at the same final number, but they calculate that number in different ways. To illustrate this, think about the effects of the transactions in the following story about GDP: -Daesun pays Most Foods Market $1,200 to cater his daughter's engagement party. He's attracted by Most Foods Market's guarantee that he'll be happy with the catering, or he'll get his money back. -Most Foods Market pays JoAnn's catering $850 to cater the party -JoAnn's Catering buys plasticware worth $200 from Kostko Assume that Kostko gets the plasticware for essentially nothing and the other costs are $0. To compute the contribution to GDP using the expenditure approach, you have to add the amount of money spent by buyers on final goods and services. Which of the following would be included in the expenditure method of calculating GDP? Check all that apply. A. Most Foods Market spends $850 B. Daesun spends $1,200 C. JoAnn's Catering spends $200 The total contribution to GDP, measured by the expenditure method, is__________. Now use the following table to compute the contributions to GDP for the economy using the value-added approach. In particular, indicate the cost of intermediate goods and teh value added at each stage of production. Stage of Production Sale Value Cost of intermediate Goods Value added Kostko $200 - _______ JoAnn's Catering 850 ___________ _______ Most Foods Market 1,200 ____________ _________ The contribution to GDP that you found using the expenditure approach corresponds to the sum of the _____________ at each stage of production. A. Sale value B. Value added C. cost of intermediate goods
Which of the following items would NOT be included in the income approach to measuring GDP?
a. Salary paid to a highway engineer by Michigan Department of Transprotation b. Unemployment compensation paid to a no longer employed teacher living in Michigan c. Wages paid to German workers manufacturing chemicals in New Jersey d. Rent paid by a tenant of an apartment that is part of a building that was constructed thirty years ago e. interest paid to a lender in Florida
(a) The table shows data from the United Kingdom in 2005. Items Billions of Pounds Wages paid to labour 685?
(a) The table shows data from the United Kingdom in 2005. Items Billions of Pounds Wages paid to labour 685 Consumption expenditure 791 Taxes 394 Transfer payments 267 Profits 273 Investment 209 Government expenditure 267 Exports 322 Saving 38 Imports 366 i) Calculate GDP in the United Kingdom. ii) Explain the approach (expenditure or income) that you used to calculate GDP. (b) Tropical Republic produces only bananas and coconuts. The base year is 2008, and the table gives the quantities produced and the prices. Quantities 2008 2009 Bananas 800 bunches 900 bunches Coconuts 400 bunches 500 bunches Prices 2008 2009 Bananas $2 a bunch $4 a bunch Coconuts $10 a bunch $5 a bunch i) Calculate Tropical Republic’s nominal GDP in 2008 and 2009 ii) Calculate real GDP in 2009 in terms of base year prices.