Accounting system-example i, Macroeconomics

 

ACCOUNTING SYSTEM-EXAMPLE I 

Consider a very simple economy. It consists of

a. A number of households.

b. A single productive organization, a 'firm' - say the Jam Corporation.

The firm, owned by some of the households, engages in the manufacture of jam from freely available fruits and labor hired from the households. Thus the only scarce input or factor of production is labor. In a given year, the firm's accounts are as follows:

                                                       Production Account  

 

547_Production Account.png

 

The consolidated account of the household sector is: 

                                                  Household Account 

 

                           2434_Production Account.png

 

The Gross National Product (GNP) of this economy is the value of output, viz.100. The Gross National Income (GNI) is the value of payments for services of factors of production - labor and 'ownership' - viz. wages, salaries and profits which also add up to 100 as they should.

GNP = GNI for this economy. 

 

 

 

Posted Date: 9/12/2012 7:17:34 AM | Location : United States







Related Discussions:- Accounting system-example i, Assignment Help, Ask Question on Accounting system-example i, Get Answer, Expert's Help, Accounting system-example i Discussions

Write discussion on Accounting system-example i
Your posts are moderated
Related Questions

Over the past month, the 500 customers have downloaded the following number of songs from WalMart's website (obviously, they have had more, but we need to use workable numbers): 13

Employment  Full employment of human and non-human resources or at least minimization of unemployment is an accepted goal of macroeconomic policy. Also the best way to alleviat

Suppose that the economy is characterized by the following behavioral equations: C= 170 + 0.7YD I= 170 G= 150 T= 100 a. What does equilibrium output equal? Y=? b. What d

Assume Workers Comp awards $X to workers not working because of injury. $X is set to equal the workers previous wages. Once workers return to work, the award payments stop. Suppose

The following is the information from the national income accounts for a hypothetical country: GDP

However, these results should be approached with due caution. The limitations and problems associated with VAR modelling have been outlined in this paper, therefore these observati

Determine the exchange rate When a currency is freely floating, the central bank doesn't have to set monetary policy to alter the external value of the currency unless instruct

Pine Village needs some additional recreation fields. Construction will cost $225,000 and annual O&M expenses are $85,000. The city council estimates that the value of added youth

The demand function for Newton's Donuts has been estimated as follows: Qx = -14 - 54Px + 45Py + 0.62Ax where Qx represents thousands of donuts; Px is the price per donut; Py