It also measures:
(3) where the economy is in the
business cycle and the size of
output gap;
(4) distribution of national income
between different social groupings
and regions, i.e. income inequality;
(5) compare standards of living
between countries.
Components of GNP
FINAL GOODS
INTERMEDIATE GOODS
Components of GNP
YEAR OF PRODUCTION
EXPENDITURE APPROACH
Expenditure Approach
Expenditure Approach
Net Exports ( NX )
THEREFORE:
GNP = C + I + G + NX + NFIA
2. Income Approach
-
Transfer Payments:
Non-marketed items
GDP = C + I + G + NX
Exercise
4226
Government purchases of
goods and services
587
Capital formation
884
Exports
2797
imports
2873
Income of OFWs
613
Income of TNCs
76
Answer Key
1.
GDP = C + I + G + NX
= 4226 + 864 + (2797
2873)
= 5601