James_pa
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How can gdp be calculated in three ways and yield the same values. The ways I am talking about are sum of all goods and services produced, sum of all incomes and sum of all expenditure in an economy. Any help will be much appreciated, thanks.
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SamuelN98
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(Original post by James_pa)
How can gdp be calculated in three ways and yield the same values. The ways I am talking about are sum of all goods and services produced, sum of all incomes and sum of all expenditure in an economy. Any help will be much appreciated, thanks.
Do you know about the circular flow of income?
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James_pa
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(Original post by SamuelN98)
Do you know about the circular flow of income?
somewhat, but I guess I'm missing something?
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mapotts53
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It originates from the circular flow of income where you can measure:
1. All incomes flowing from firms to households = National Income
2. All expenditure flowing from households and being injected = National Expenditure
3. The value of all goods and services produced in the economy by firms = National Output.
The economy is in equilibrium when National Income = National Expenditure = National Output
Hope this helps
Dr Mark Potts
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James_pa
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(Original post by mapotts53)
It originates from the circular flow of income where you can measure:
1. All incomes flowing from firms to households = National Income
2. All expenditure flowing from households and being injected = National Expenditure
3. The value of all goods and services produced in the economy by firms = National Output.
The economy is in equilibrium when National Income = National Expenditure = National Output
Hope this helps
Dr Mark Potts
Thanks sir
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