National income accounting, Microeconomics

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National income accounting:

Final Goods: Final goods are goods and services which are being purchased for final use and not for resale or further processing or manufacturing.

Value Added: It is the extra worth that a firm or a producer adds to a product in the course of its production. If a gari processing firm purchases cassava for hundred thousand cedis and later turns it into gari which is sold or valued at hundred and fifty thousand cedis, then, the value added is fifty thousand cedis (i.e. 150,000 - 100,000 = 50,000).

Current Output: It refers to goods and services produced in the accounting period. This is so because under national income we are accounting for output within a defined time or accounting period say for 1st January 2000 to 31st December 2000.

Factor Cost: The net price, that is, the market price minus indirect taxes or plus subsidies, is the factor cost, which is the amount received by the factors of production in that productive activity.


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