ch12rSection III overview演示教学.pptVIP

Section III overview;Chapter 12 National Income Accounting and the Balance of Payments;Introduction;The national income accounts and the balance of payments accounts are essential tools for studying the macroeconomics of open, interdependent economies. National income accounting Records all the expenditures that contribute to a country’s income and output Balance of payments accounting Helps us keep track of both changes in a country’s indebtedness to foreigners and the fortunes of its export- and import-competing industries;The National Income Accounts;National Product and National Income National Income It is earned over a period by its factors of production. It must equal the GNP a country generates over some period of time. One person’s spending is another’s income (i.e., total spending must equal total income). ;Capital Depreciation, International Transfers, and Indirect Business Taxes Adjustments to the definition of GNP: Depreciation of capital It reduces the income of capital owners. It must be subtracted from GNP (to get the net national product). Net unilateral transfers of income They are part of a country’s income but are not part of its product. They must be added to the net national product. Indirect business taxes They are sales taxes. They must be subtracted from GNP. ;Gross Domestic Product (GDP) It measures the volume of production within a country’s borders. It equals GNP minus net receipts of factor income from the rest of the world. It does not correct for the portion of countries’ production carried out using services provided by foreign-owned capital. ;The National Income Identity for an Open Economy It is the sum of domestic and foreign expenditure on the goods and services produced by domestic factors of production: Y = C + I + G + EX – IM (12-1) where: Y is GNP C is consumption I is investment G is government purchases EX is exports IM is imports In a closed economy, EX = IM = 0.;China`s real GDP