Relationship with 8 variants of national product aggregates, Macroeconomics

Assignment Help:

 

RELATIONSHIP WITH 8 VARIANTS OF NATIONAL PRODUCT AGGREGATES 

We have shown the distinction between national product at market prices and national product at factor cost, based on whether or not net indirect taxes have been included. And there is also a distinction between gross or net national product according to whether investment is inclusive of capital consumption or not. Further, a distinction has been drawn between domestic and national product, according to whether we are measuring net factor income from abroad (i.e. the net return on factors owned by nationals of the country concerned) or whether we are measuring what is produced within the domestic economy. This implies that there are eight possible combinations of national product aggregates, as shown below.

Gross Domestic Product (GDP)    at market prices (MP)

                                                 at factor cost (FC)

Gross National Product (GNP)      at market prices (MP)

                                                at factor cost (FC)

Net Domestic Product (NDP)        at market prices (MP)

                                                  at factor cost (FC)

Net National Product (NNP)         at market prices (MP) 

                                               at factor cost (FC)

The way that these national product aggregates are related to each other can be understood from the figure 3.2.

                                                     Figure 3.2 

595_Figure 3.2.png

 

 

We can sum up the differences between gross and net, market prices and factor cost and national and domestic concepts in the following way:
Gross=Net + Depreciation

Market Prices=Factor Cost + [Indirect Taxes - Subsidies]

National=Domestic + Net Factor Income from Abroad

There are some national product aggregates that are more frequently met with and we have several ways of ordering them. One of these is as follows:

i. Gross domestic product at market price + net factor income from abroad equals

ii. Gross national product at market prices - net indirect taxes (indirect taxes - subsidies) equals

iii. Gross national product at factor cost - capital consumption (depreciation) equalsiv. Net national product at factor cost, which is popularly known as national income.  

 


Related Discussions:- Relationship with 8 variants of national product aggregates

Lag length criteria, In order to estimate aVAR, alag length must be used in...

In order to estimate aVAR, alag length must be used in the estimation. There are many different criteria which can be used to signal the ideal lag length to use.Asteriou & Hall (20

A history of canadian economy, i have an assignment i need it to be done by...

i have an assignment i need it to be done by thursday march the 10th before midnight

Problems of measuring productivity in actual work situations, Discuss the p...

Discuss the problems of measuring productivity in actual work situations. Also how productivity might be measured for each of the following industries? Finance and insurance (examp

The monetary system.., bank A has a leverage ratio of 10 while bank B has a...

bank A has a leverage ratio of 10 while bank B has a leverage ratio of 20 similar losses on bank loans at the two banks cause the value of their assets to fall by 7 percent. Which

How are individual makes choices, How are individual makes choices? Fun...

How are individual makes choices? Fundamental principles behind the individual choices are as follows: 1. Resources are scarce . 2. The real cost of anything is what y

Time inconsistency of monetary policy, I will need to upload a file as the ...

I will need to upload a file as the questions are bit too long to type

Average cost of capital, Suppose a firm raises $23 million dollars by issui...

Suppose a firm raises $23 million dollars by issuing debt at a cost of 6.1%, raises $14 million by issuing common stock at a cost of 8.6% and raises an additional $10 million by is

Gross domestic production, why is imports subtracted from the expenditure a...

why is imports subtracted from the expenditure approach

Aggregeta demand and aggregate supply, Using an aggregate demand and supply...

Using an aggregate demand and supply diagram, explain how each of the following scenarios affects the equilibrium price level and aggregate output a/Consumers expect a recession b/

Explain about a model and use of it in economics, Explain about a model and...

Explain about a model and use of it in economics. A model is a simplified demonstration of a real situation which is used to better understand real-life circumstances. The

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd