...UNIT I NATIONAL INCOME AND MACROECONOMICS 1 National Income National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. Normally this period consists of one year duration, as a year is neither too short nor long a period. National product is usually used synonymous with National income. Alfred Marshall in his ‘Principle of Economics’ (1949) defines National income as “The labour and capital of a country, acting on its natural resources, produce annually a certain net aggregate of commodities, material and immaterial, including services of all kinds…..and net income due on account of foreign investments must be added in. This is the true net National income or Revenue of the country or the national dividend.” Irving Fisher defined national income as “The national dividend or income consists solely of services as received by the ultimate consumers, whether from their material or from human environments. Thus, a piano or an overcoat made for me this year is not a part of this year’s income, but an addition to capital. Only the services rendered to me during this year by these things are income.” Central Statistical Organization defines National income as “National Income is the sum of factor income earned by the normal residents of a country in the form of wages, rent, interest and profit in an accounting year.” Concepts of National Income There are different concepts of National Income, namely; GNP...
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...There are three sections to differ the economy system used between Angola and Switzerland which are: * Index of economy freedom * Gross National Income and Gross Domestic Product * DHL Global Competitiveness Index 2013-2014. 1. Index of economy freedom Angola According to the 2014 Index of Economy Freedom, Angola listed as 160th out of 178 countries that are under observation. With total score is 47.7, this nation has a lot of troubles in term of rule of law, open market and government spending. In law, the government uncontrolled the corruption cases and it might become the barrier for international investors to contribute Angola’s wealth because it is risky to set up the business inside the distrust government. For evidence, the corruption perception index 2012 stated that Angola ranked as 22nd country most corrupt. Besides, this country got low score in term of property right which is 15. Based on the information, Angola is one of the strong socialism countries due the government control the income of the business and fail to reform the economy since the weak rule of law and trade freedom. Same with other socialism nations, the government ignore the opinion from their citizens. In fact, the labor freedom score in 2013 was 44.8, less 15.9 point from the average Index of economic freedom while the freedom of the press was under depression as ranked 157th out of 197 nations. Therefore the policy of “property is held in common and not individually, and relationships...
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...Name Institution Instructor Title Describe the terminology of macroeconomics including GDP, GNP, national income business cycles, monetary policy, fiscal policy, inflation and unemployment Macroeconomics is a broad sub-field of economics that establishes the behavior, outlook and structure, collective and established decision making system of an economy at large and usually involves national economies, regional and global economies with little or no involvement of the individual markets. Gross National Product is a determining tool in macroeconomics that measures a nation’s economy and status through international investments and residents working over-seas. GNP excludes any product values produced by foreign investors within the country. GNP is a great indicator in macroeconomics when assessing economic progress in comparison with Gross Domestic Income. (Clark & Montjoy, 2001) Macroeconomics uses GDP to determine the value of all market products and services produced within a given boundary usually a nation in a period of one year. At every stage of production, the value of all goods is added and the economic growth established based on the previously assessed standards. Macroeconomists explain that unemployment tends to reduce with a rising GDP rate since the output is increased and thus need for more skilled and unskilled labor force. Inflation gives an explanation on the rate at which product prices increase over time. Macroeconomists study this phenomenon...
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...recessions and cycles. GDP Growth: Recessions and Cycles Figure 1 - US Real GDP 1930 – 2014 with 2009 as the Base Year Source: (Shiller, 2015); (Federal Reserve Bank of St. Louis, 2015) Figure 1 above shows the real Gross Domestic product (GDP) of the United States for the years 1930 to 2014. Real GDP is essential and important as it shows the general soundness of the economy. Thus, when real GDP is high it means other macroeconomic factors such as employment and economic growth are positive and vice versa. This is because real GDP is substantially correlated to these macroeconomic factors. Therefore, the chart above shows that America’s GDP has been growing steadily over the years. This consistent growth has seen to it that America’s real GDP hit a high of 16.16 trillion U.S. dollars up from a low of around 1.06 trillion U.S. dollars in 1930. It is also apparent that the steady growth in the real GDP has led to many significant improvements in the economy and standards of living. Thus, it is evident that the standards of living and other macroeconomic factors are better now than in the mid nineteen hundreds (OpenStax College, 2014). Further, statistical and economic analysis shows that the real GDP of America has an average median and mean of approximately 6.34 and 7.20 trillion dollars respectively (Shiller, 2015). This is caused by the various cyclical changes in the economy. Despite the steady growth in real GDP the U.S. economy has experienced several recessions, depressions...
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...Domestic Product calculates the value of economic productivity in a given year accustomed for changes in price. It takes into consideration inflation before giving results. Real GDP is very different from Nominal GDP. This is proven below: 1. Nominal GDP does take inflation or deflation into consideration in its calculation whereas Real GDP is obtained only after including the effect of inflation or deflation. 2. Nominal GDP is calculated at current prices whereas Real GDP is calculated on a base year. 3. Real GDP shows the actual picture of economic growth of the country, which is not with the case of Nominal GDP. c).Describe three different ways that national income is measured and a difficulty associated with each method. Three ways of measuring national income is through Product Method, Income Method and Expenditure Method....
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...224,000. The Lebanese economy is noted for its resilience, having withstood wars and invasions with Israel as well as internal sectarian clashes and at times dominating influence from Syria. It is this resilience that helped Lebanon achieve 9% growth during the Great Financial Crisis. The growth was nurtured by controlled banking regulations that restricted credit and therefore, its impact during the recession. As of 2011, the World Bank classified the middle class in Lebanon as those people who earn between $15,000 and $27,000 annually. But the World Bank statistics tell Lebanon’s actual story. Citing its (World Bank) numbers, Neaime estimates that only 5-10 percent fit this category. Seventy percent of the population generates an annual income of less than $10,000 annually while 15 percent live in abject poverty The other country I am focusing on is Egypt. Egypt is an...
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...ECONOMIC SURVEY 2014-15 STATISTICAL APPENDIX STATISTICAL APPENDIX : ECONOMIC SURVEY 2014-15 1. National Income and Production 1.1 1.2 1.3 A1 1.3 A2 1.3 B1 1.3 B2 1.4 A 1.4 B 1.5 1.6 1.7 A 1.7 B 1.8 A 1.8 B 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.25 1.26 1.27 1.28 Gross National Income and Net National Income .................................................................................................. Annual Growth Rates of Gross National Income and Net National Income ...................................................... Gross Value Added at Factor Cost by Industry of Origin (at Constant Prices) ................................................... Gross Value Added at Basic Prices by Industry of Origin (at Constant Prices) ................................................... Gross Value Added at Factor Cost by Industry of Origin (at Current Prices) ...................................................... Gross Value Added at Basic Prices by Industry of Origin (at Current Prices) ...................................................... Annual Growth Rates of Real Gross Value Added at Factor Cost by Industry of Origin (Per cent) ................ Annual Growth Rates of Real Gross Value Added at Basic Prices by Industry of Origin (Per cent) ................ Gross Domestic Saving and Gross Capital Formation (at Current Prices) .......................................................... Gross Domestic...
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...Nigeria, located in West Africa, is Africa’s most populous country with the recent estimate at 170 million. In spite of possessing huge human capital, fertile soils and being oil-rich, Nigeria can teach the mineral rich world a lesson or two about what not to do. Corruption, political instability, pollution and poor management are some of the reasons Nigeria has not been able to rise and gain the status it should have in the African continent. Macro-economic factors • Gross Domestic Product (GDP) A look at the real GDP growth of Nigeria shows that it has ranged between 6.4% and 7.8% from 2007-2013. It reached its peak of 7.8% in 2010 and is forecasted to be 6.4% in 2012 as compared to the world average of 2.2% and 3.9% for Sub-Saharan Africa. Economists say that it is in fact the non-oil sector that has pushed the economy forward, and will continue to do so. Growth can largely be attributed to activities in telecommunications followed by building and construction, and the services sector in general. Regulatory body, the Nigerian Communications Commission (NCC) was established in 1992, and commenced full market liberalization and reform in 2000. It is sensed that investment in telecom has triggered off an economic chain which has positively impacted other sectors of the economy. GDP growth has not improved the living standards of the Nigerian people. They continue to be inundated with increased unemployment, poverty, poor healthcare among various others. As seen below...
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...The Philippine economy managed to grow in the first semester of 2014 despite the haunting effect of Typhoon Yolanda that hit the country during the fourth quarter of 2013 and the lingering weakness of the global economy. For the first semester of 2014, Gross Domestic Product (GDP) grew by 6.0%, relatively slower than 7.8% reported in the first semester of 2013 and below the 6.5% -7.5% National Government’s target for the year. Meanwhile, Gross National Income (GNI) accelerated by 7.2% from 6.8% in the first semester of 2013. The Philippine is usually described as domestic-demand driven economy, but because of logistical challenges this year, the second quarter growth of 2014 was driven by net exports. Total exports grew by 10.3 % in the second quarter of 2014, a rebound from the 7.7% contraction in the same period last year. The growth was fuelled by exports of goods and exports of services. Total exports of goods increased by 10.0% in the second quarter of 2014 from a decline of 8.8% in the same period last year. Electronics manufacturers, the country’s largest exporters, improved their export growth forecast for the year to 8.0% from the previous 5.0% with demand expected to improve on the back of the economic recovery in the industry’s major export markets like the United States and China, and the lifting of Manila’s extended truck ban. Household Final Consumption Expenditures continued to expand in the second quarter of 2014 by 5.3% relative to the 5.1% reported in the...
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...of 1 page, double-spaced, Word or PDF document. However, you can have unlimited number of exhibits that should be put in an Appendix in the same file. Hint: * http://globaledge.msu.edu * Go to Resource Desk: http://globaledge.msu.edu/ResourceDesk/ * Search Phrase: "World Development Indicators" * Resource Name: World Bank: World Development Indicators globalEDGE™ * Category: "News & Periodicals: Publications" * Website: http://data.worldbank.org/indicator On the World Bank website, click on the "By Country" tab and select India. Then, go to the corresponding indicators. Extended Hints: A. Economic policy and external debt Gross National Income (GNI) * Income generated by a nation’s residents from domestic and foreign activity. * Preferred over GDP which measures in addition income from nonresidents. GNI/capita: * reveals purchasing power of the country. * Compare to other countries, e.g., high values and advanced economies. Growth Rate in GNI/Capita * * Important since high values indicate a high growth market. * As GNI or GNI/capita it is affected by underground economy (ideally we need an estimate for this). * Managers usually will prefer a fast-growing market, all else constant. If a choice has to be made between (1) high GNI/capita but low...
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...Study Aide for Module 2-Written Assignment 2 Attached is the Study Aide for M2 A2. Critical !!!!!!! It is very important to read the study aides for each written assignment. You will find these aides for each week posted here in Questions for the instructor. It will save you hours of homework time and most of the students receive a high grade in the class if they use them and get an early start on these difficult written assignments. Here is some advice to help you also. With all of these written assignments in the class, read the directions and study aides closely before actually starting the work. Read the directions first. Many students wait until the last night before it is due and have a difficult time getting it done. Be sure to scroll to the bottom of this document for important information. Here is the rubric for this assignment. M 2 / Assignment 2 Grading Criteria | Maximum Points | Points Earned | Researched the data correctly and answered each question in a complete and accurate manner. Sixteen points for each question, 1-5. | 80 | | Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation. APA formatting is used with a title page, APA page numbering, and a reference page. | 20 | | Total: | 100 | | We are requiring APA formatting on all assignments. No appendix introduction or conclusion in needed. Title page...
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...Fundamentals of Macroeconomics The following terms will be define, gross domestic product (GDP), real GDP, unemployment rate, inflation rate, and interest rate. The circular flow diagram will be introduced to describe the representation and interactions with households, government, and businesses. The current economic conditions of the world affects individuals. The most valuable economic indicators will be recognized as affecting the organization along with reasoning of the effect. Part One: * Gross Domestic Product (GPD)- The GDP has two approaches, income and expenditure. The income approach is measured by the income earned by national household during the year. The expenditure approach is the total at amount spent on goods and services produced in a nation by households, company's, the government as well as foreigners. * Real GDP- Real GDP is the change that shows the value of goods and services produced during a given year but is expressed in base year prices. To calculate real GDP, the nominal GDP is divided by a price index then multiplied by 100 (Colander, 2008) * Nominal GDP- Nominal is the opposite of real GDP. This is a figure that has not been updated for inflation or changes during a specific year. * Unemployment rate- This is the rate of the total work force, who are able to work, is unemployed. These people are seeking jobs and are willing and able to work. Depending on the economic situation of the country, the...
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...From: National Accounts at a Glance 2013 Access the complete publication at: http://dx.doi.org/10.1787/na_glance-2013-en National income Please cite this chapter as: OECD (2013), “National income”, in National Accounts at a Glance 2013, OECD Publishing. http://dx.doi.org/10.1787/na_glance-2013-6-en This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. INCOME 4. National income While per capita gross domestic product is the indicator most commonly used to compare income levels, two other measures are preferred, at least in theory, by many analysts. These are per capita Gross National Income (GNI) and Net National Income (NNI). an imputation, and, since there is no actual transaction, it is necessary to impute an outflow of the same amount. The imputed outflow is treated as a financial transaction (a reinvestment of earnings abroad) and not as an outflow of property income. Countries with large stocks of outward foreign direct investment may be shown as having large receipts of property income from abroad and therefore high GNI even though much...
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...[pic] A2 Business Studies Pre-Release Research Task ‘Development in Emerging Markets: China’ Learner Name: _____________________________ Preparing for A2 Business The Unit 3 examination Strategies for success • 25% of A level • 1 hour 45 minutes exam • 80 marks • The exam is case study based and comprises one 10 mark calculation question, two 18 mark evaluation questions and one 34 mark report. The Unit 4 examination The Business Environment and Managing Change • 25% of A level • 1 hour 45 minutes exam • 80 marks • Section A: Pre-release research tasks leading to a 40 mark essay • Section B: Choice of 3 essays, one must be chosen for 40 marks • This unit is synoptic – this means that it pulls together all the material from the entire AS and A2 specification. There are two key additional elements of preparation for this paper: Complete the research task The research task is designed to enable you to investigate in detail a small part of the Unit 4 specification. The research brief will give you precise guidance on the tasks to complete. Do not make too much of this task and extend your research beyond what is asked. Do, however, relate your research to a variety of large businesses producing goods and services and operating in different markets. Read widely about business You should read newspapers, magazines, and books, watch television and surf the internet for news...
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...Macroeconomic Indicators & objectives Deals with the performance of the economy as a whole. Four main indicators to measure this are: 1. Economic growth 2. Unemployment 3. Inflation 4. The current account of the balance of payments In relation to each indicator, they have objectives which are strong and sustainable growth, low employment, low and stable inflation and an acceptable balance of payments position. Measuring economic growth • Main measure is GDP ( Gross Domestic Product) • GDP is the value of output produced within the domestic boundaries of the UK over a period of time, usually a year. • An alternative measure of national income is GNP (Gross National Product)/ GNI (Gross National Income). • It measures the value of income from UK owned factors of production over a given period of time, usually a year. • GNI = GDP + Net property income from abroad (NPIA) • NPIA is the net balance of interest, profits and dividends (IPD) coming into the UK from UK assets owned overseas matched against the outflow of profits and other incomes from foreign owned assets located in the UK. • National Output = National Income = National Expenditure • This is basically the circular flow of income Measuring unemployment • The unemployed are those of a working age who are actively seeking...
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