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Expenditure method is also called Flow-of-Expenditure method, consumption and investment method, income Disposal method, etc.
Expenditure method measures the final expenditure on goods domestic product market prices during a year.This method measure the expenditure on GDPMP during a year.The various steps involved in the use of expenditure method are briefly summarized as follows: 1. First Step: It involves identification of economic units incurring final expenditure. Different economic units are:(i) Household sector(ii) Producer sector(iii) Government sector(iv) Rest-of-the world sector. 2. Second Step: It involves classification of final expenditure into the following categories:(i) Final Consumption Expenditure: (a) Private final consumption expenditure, and (b) Final consumption expenditure of the government(ii) Final Investment Expenditure: (a) Gross domestic fixed capital formation, (b) Changes in stocks, and (c) Net acquisition of valuables.(iii) Net exports:Exports minus imports 3. Third Step: It involves the measurements of final expenditure. The various components of final expenditure are measured as follows:To measure Private Final Consumption Expenditure, the volume of final sale of durable goods, semi-durable goods, non-durable goods and services to the consumer households and non-profit institutions serving households is multiplied by market prices (retail prices). The direct purchases of resident households made abroad are added. The direct purchases of resident non-resident households in the domestic market are deducted, i.e.,Thus, according to the expenditure method GDPMP = Private Final Consumption Expenditure + Expenditure + Government Final Consumption Expenditure + Gross Domestic Investment + Net Exports.
The cash flows (CF t ) associated with an investment are listed below (assume that each cash flow occurs at the beginning of each year): CF 0 = -200
Knowing that a neoclassical, capitalist economy depends on continuous economic growth (by making its production, distribution, and consumption more efficient), what might a savvy p
1) Consumption is positively related to stock market wealth but negatively related to taxes and tax rates.
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The _______________ illustrates the notion of opportunity cost. If an economy is fully utilizing its resources, it can produce more of one product only if it produces less of anoth
what is money multiplier? what is role , importance, advantages , disadvantages , limitations and examples of money multiplier?
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From stock and Watson 3rd edition introduction to econometrics Using the data set Teaching Ratings described, carry out the following exercises. a) Run a regression of Course
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