Chapter 12 National Income Accounting and the Balance of Payments
Chapter 12 ◼ National Income Accounting and the Balance of Payments
Chapter Organization ■ Introduction The National Income accounts a National Income Accounting for an Open Economy a The balance of payment accounts Summary
2 Chapter Organization ◼ Introduction ◼ The National Income Accounts ◼ National Income Accounting for an Open Economy ◼ The Balance of Payment Accounts ◼ Summary
Introduction ■ Microeconomics It studies the effective use of scarce resources from the perspective of individual firms and consumers Macroeconomics It studies how economies' overall levels of employment production, and growth are determined It emphasizes four aspects of economic life >>Unemployment >)Saving >rade imbalances >>Money and the price level
3 Introduction ◼ Microeconomics – It studies the effective use of scarce resources from the perspective of individual firms and consumers. ◼ Macroeconomics – It studies how economies’ overall levels of employment, production, and growth are determined. – It emphasizes four aspects of economic life: »Unemployment »Saving »Trade imbalances »Money and the price level
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 income and output a Balance of payments accounting Helps us keep track of both changes in a countrys indebtedness to foreigners and the fortunes of its export- and import-competing industries
4 ◼ 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 exportand import-competing industries Introduction
The National Income Accounts t Gross national product(GNP) The value of all final goods and services produced by a country's factors of production and sold on the market in a given time period It is the basic measure of a country's output
5 The National Income Accounts ◼ Gross national product (GNP) – The value of all final goods and services produced by a country’s factors of production and sold on the market in a given time period – It is the basic measure of a country’s output