Measures of national income, output and expenditure

Question 1

• The income, output and expenditure measure should be approximately equal to what

Answer 1

Each other

Question 2

National output looks at what?

Answer 2

What is produced in our economy

Question 3

National income is what?

Answer 3

Total incomes in the economy

Question 4

National expenditure measures what?

Answer 4

The total spent in our economy

Question 5

What is an issue with the output method

Answer 5

There are double counting processes if one firm uses another firms goods to produce an output

Question 6

How do we counter the output method issue

Answer 6

We use the added value method, this uses the firms gross value of its output minus what it inputted

Question 7

GVA stands for what

Answer 7

Gross Value added, Its the final output produced by all firms in an economy

Question 8

GDP = GVA +( Taxes -?)

Answer 8

Subsidies

Question 9

GDP = C + I + G + (X-?)

Answer 9

M

Question 10

There are 3 types of income which get added to make gross national income, What are these?

Answer 10

Compensation of employees- Their wages including NI, Taxes and pension contributions
Operating surplus- Net business income after paying for costs and pre-tax profit
Mixed incomes- Incomes earned by people selling their service or output, but whom are not employed by another organisation ( Self - employed)