National Income and GDP Concepts
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National Income and GDP Concepts

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Questions and Answers

What is the formula for calculating Gross Domestic Product (GDP) using the industrial origin approach?

  • GDP = AS + PS + CS
  • GDP = AS + IS + MS
  • GDP = IS + SS + TS
  • GDP = AS + IS + SS (correct)

    • Which sector contributes the highest value to the GDP in the provided figures for the year 2022 at current prices?

  • Industry (correct)
  • Agriculture, forestry, and fishing
  • Mining and quarrying
  • Services

    • In the GDP analysis by industry sector, which of the following industries shows a decrease from 2020 to 2022 when looking at constant prices?

  • Agriculture, forestry, and fishing (correct)
  • Construction
  • Electricity, steam, water and waste management
  • Manufacturing

    • What economic indicators are reflected in the provided table for years 2020 to 2022?

    <p>Gross National Income and Gross Domestic Product by industry</p> Signup and view all the answers

    Which industry among the following had the lowest contribution to the GDP in 2021 at current prices?

    <p>Mining and quarrying</p> Signup and view all the answers

    Which components contribute to the Expenditure Approach of GDP measurement?

    <p>Household Consumption and Government Expenditure</p> Signup and view all the answers

    How is Net National Product (NNP) calculated?

    <p>GNP - Depreciation</p> Signup and view all the answers

    What is the formula to compute National Income (NI)?

    <p>NNP - Indirect Taxes</p> Signup and view all the answers

    What does Gross National Product (GNP) measure?

    <p>The market value of all final goods and services produced by all nationals</p> Signup and view all the answers

    Which of the following statements about Gross Domestic Product (GDP) is accurate?

    <p>It encompasses all final goods and services produced within the country's boundaries.</p> Signup and view all the answers

    Which of the following is NOT a component of the Income Approach to GDP measurement?

    <p>Government Expenditures</p> Signup and view all the answers

    What variable represents the change in physical output in the economy adjusted for price changes?

    <p>Real GNP/GDP</p> Signup and view all the answers

    Which characteristic applies to both GNP and GDP?

    <p>They are both flow concepts measured over a specific time period.</p> Signup and view all the answers

    Which sectors are included in the computation of final expenditures in the Expenditure Approach?

    <p>Households, Businesses, Government, and Foreign Sector</p> Signup and view all the answers

    What does nominal GNP/GDP indicate?

    <p>The value measured based on current prices</p> Signup and view all the answers

    What is the formula for calculating GDP using the Expenditure Approach?

    <p>C + I + G + (X - M)</p> Signup and view all the answers

    Which of the following is NOT included in GNP/GDP measurement?

    <p>Intermediate goods purchased for further processing</p> Signup and view all the answers

    Why is GDP an important economic indicator?

    <p>It measures the total production within a country.</p> Signup and view all the answers

    Which element is used to calculate indirect business taxes and adjustment discrepancies in the Income Approach?

    <p>Indirect Business Taxes (IBT)</p> Signup and view all the answers

    What types of goods are included in GNP/GDP?

    <p>Final goods and services purchased for final use</p> Signup and view all the answers

    Which factor does NOT directly impact GDP calculations?

    <p>The economic policies in place</p> Signup and view all the answers

    Study Notes

    Gross National Income and Gross Domestic Product (GDP)

    • GDP can be calculated using the Industrial Origin Approach: GDP = AS + IS + SS (Agricultural Sector, Industrial Sector, Services Sector)
    • GDP figures are presented at both current and constant prices.
    • In 2022, the agricultural sector contributed over 2 Billion Pesos to the GDP at constant prices.
    • Manufacturing accounts for the largest share of the industrial sector, contributing over 3.7 Billion Pesos to the GDP in 2022.

    Gross National Product (GNP)

    • GNP/GDP at constant prices measures changes in output over time.
    • Nominal GNP/GDP measures the value of output in a given period, using the prices of that period.

    Per Capita Income

    • Per capita income is calculated by dividing the GDP by the population.

    National Income Accounting

    • Net National Product (NNP): GNP minus Depreciation.
    • National Income (NI): NNP minus indirect taxes.

    Approaches to GDP Measurement

    • Expenditure Approach: GDP = C + I + G + (X - M), where:
      • C = Personal Consumption Expenditure
      • I = Private Domestic Investment
      • G = Government Consumption Expenditures
      • X = Exports
      • M = Imports
    • Income Approach: GDP = W + R + i + P + IBT + D, where:
      • W = Wages, Salaries, and Supplements
      • R = Rental Income
      • i = Net Interest
      • P = Corporate Profits + Income of Unincorporated Enterprises
      • IBT = Indirect Business Taxes
      • D = Depreciation

    Gross Domestic Product (GDP)

    • Measures the total market value of all final goods and services produced within a country's borders in a given period.
    • Only final goods and services produced in the current year are included in the GDP.

    Gross National Product (GNP)

    • Measures the total value of all goods and services produced by a nation's residents, both domestically and abroad, in a given period.
    • It includes the value of production by foreign nationals employed within the country.

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    Chapter 2 National Income Accounting PDF

    Description

    Explore key concepts related to Gross National Income, Gross Domestic Product, and various measurement approaches in this quiz. Understand how different sectors contribute to GDP, the significance of nominal versus constant prices, and the calculations behind per capita income. Test your knowledge on national income accounting and GDP measurement methods.

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