Aggregate prices, outputs and Econ Growth

Question 1

GDP Calculation

Sum of value
Final of value output
Income Approach

Answer 1

Both result in the same

1. Sum of value
   Need the value of every production and distribution stage
2. Final of value output
   Final data of good or services
3. Income approach

Total income of househoulds and companies

Question 2

GDP and NATIONAL INCOME relation =

Answer 2

GDP = Market Value of all goods and services produced ia a county econ

GDP = National income + CCA + SD

CCA = (capital consumption allowance)

SD = Statistical discrepancy

[ NI = ∑ Wages, +
Corporate and govs companies before tax
+ Interest income
+ Unicorporate owners business income + rental
+ Indirect bussiness tax - Subsides ]

Capital consumption Allowance =
Depriciation during the period

Statistical discrepancy = Adjustment to GDP when it is measured with Income Approach,
accounts for difference between expenditures approach

Question 3

TRADE BALANCE FORMULA:
(G-T) =

Answer 3

(S-I) - (X-M)

(G-T) = Fiscal Defict
(S-I) = Savings - Invest.
(X-M) = Trade import

Investments =
. Allocate in fixed assets and inventory
.funded by National svings, foreign borrowing or governement savings

Question 4

What is Disposable income?

What is a sustainable GDP Growth?

Answer 4

Personal income - Taxes

Sustainable is a long term groth, affected by increases in: Natural resources, Physical material, Labor

Question 5

GDP Formulas

Trade balance
GDP (Income approach)
GDP regular
Function to analyze GDP (Based on productivity)

Answer 5

1. (G-T) = (S-I)-(X-M)
2. GDP = CCA + SD
3. GDP = C + I + G + (X-M)
4. Y = A x F (L, k) // A = Productivity; L = labor ; k = Kapital

Question 6

Long Run Aggregate supply:

Answer 6

vertical line. Inelastic because prices can vary