1. National Income Accounting
Chapter 13 Section 1
National Income Accounting

2. Clip of the Day

4. National Income Accounting
Measuring the overall economy’s output (production) and its income.

5. Gross Domestic Product (GDP) – Total dollar value of all final goods and services produced in the nation during a single year.
Measuring Value – GDP always in terms of dollar value (not # produced)

6. GDP Measures only FINAL goods and services – To avoid double counting.
Only count NEW goods - not resale goods

7. C + I + G + X = GDP Computing GDP
Consumer Sector (C) – Goods and services purchased by consumers
Investment Sector (I) – Business purchases (Example – printing press)
Government Sector (G) – Goods and services purchased by government
Net Exports (X) – Nations exports (minus) imports
C + I + G + X = GDP

10. Recession – 2 Consecutive quarters (6 months) of declining Real GDP

12. GDP Per Capita – GDP For a given year divided by the population of a given country.

13. Measurements of Income
National Income (NI) – Total income earned by everyone in the economy.
Personal Income (PI) – Total Income individuals receive before personal taxes are paid
Disposable Personal Income (DPI) – Income remaining after taxes are paid