Economics national income Gross domestic Product gross national product per capita income. Economics national income Gross domestic Product gross national product per capita income. Economics national income Gross domestic Product gross national product per capita income. Economics national income Gross domestic Product gross national product per capita income. Economics national income Gross domestic Product gross national product per capita income. Economics national income Gross domestic Product gross national product per capita income.

2. Nations Income.

3. Learning Objectives
1. Identify the health indicators of economy.
2. Understand and compute:
• GDP;
• GNP and;
• Per capita income
3. Contribution of OFW in GPD.

4. The Core
Adgenda of
Macroeconomic
s

5. The Core Adgenda of Macroeconomics
Macroeconomics monitors the overall health of the

6. 1. Growth
3.
Employment
2. Prices
Economy’s 3 Main Health Indicators

7. BUT HOW DO
WE
MEASURE
ECONOMIC
GROWTH?

8. Value of all goods and
services produced by the
country in a specified period
of time.
Measure Economic Growth
GDP

9. If one is to measure
how a person is doing
economically, they
should look at how the
person spends and
earns.
Measurement of Income and Spending

10. Measurement of Income and Spending
EARNS
MORE
=
SPENDS
MORE

11. Measurement of Income and Spending
EARNS LESS
=
SPENDS
LESS

12. Measurement of Income and Spending.
The economy works similar in
fashion.
An economy doing poorly
means that it is earning less
than the past values as
measured by the GDP.

13. Measurement of Income and Spending
INCOME SPENDIN
G
GDP

14. INCO
ME
SPENDI
NG
GDP

15. Adding its
Total
Income
Adding All
Expenditur
es
Measurement of Income and Spending
Computing
GDP

16. GROSS
DOMESTIC
PRODUCT

17. Gross Domestic Product
Summation of all the
final goods and services
produced within a
country for a specific
period of time.

18. • Annual GDP forecasts a trend.
• Quarter GDP updates figures.
YEARLY
QUATERLY
Gross Domestic Product

19. Formulas For GDP
EXPENDITUR
E METHOD
INCOME
METHOD
PRODUCTION
METHOD

20. Formula
s
For GDP
EXPENDITURE
METHOD
IN
CONSUMPTION
+
INVESTMENT
+
GOVERNMENT
+
NET EXPORTS

21. Formula
s
For GDP
INCOME
METHOD
WAGES
+
RENTAL RATE ON
CAPITAL
+
FIRM PROFITS

22. Formula
s
For GDP
PRODUCTION
METHOD
FINAL VALUE OF
ALL GOODS AND
SERVICES
+
INTERMEDIATE COST

23. GDP USING VALUE-ADDED APPROACH

24. Formula: GDP = A+I+S
GDP USING VALUE-ADDED APPROACH
• Used to measure GDP
• Ensures that NO DOUBLE
COUNTING IS DONE.

25. GDP USING VALUE-ADDED APPROACH
Formula: GDP = A+I+S

26. Formula: GDP = A+I+S
STAGES OF
PRODUCTIO
ON
COST
GENERATED
D COST
VALUE
ADDED
FISHERM
MAN
CATCHES
SARDINES
0 P1500 P1500
FACTORY
COOK SARDINES P1500 P4000 P2500
CANNER
Y
MAKE CANNED
GOODS
P4000 P6000 P2000
TOTAL P11500 P6000-GPD
CH

27. GDP USING
EXPENDITURE
APPROACH
Y = C + I + G + (X – M)

28. Y - GROSS DOMESTIC PRODUCT
=
C - CONSUMPTION
+
I - INVESTMENT
+
G - GOVERNMENT
+
(X – M) - NET EXPORTS

29. CONSUMPTION
S
spends their income to buy goods and
services
GOODS
there are 2 classification in goods
o Durables – goods that do not depleted with
use
o Non-durables – products that get depleted
or decreases when consumed or used
INVESTMENTS goods that was bought for future use
Definition of Terms:

30. Definition of Terms:
GOVERNMENT
specify the value of the spending transactions
of the state after collecting taxes from the
household and the firms
NET EXPORTS different between imports and exports

31. Differences between current
GDP and Real GDP
GDP
Real GDP
Nominal
GDP

32. Nominal GDP
 Current GDP.
 Measures output using current prices.
 Better gauge of consumer purchasing power.

33. Real GDP
 Measures output using constant prices.
 real GDP is adjusted for inflation
 More accurate

34. EXPORTS
Gross Domestic Product
Increase in
GDP
=
Increased
output
&
Inflation of

35. EXPORTS
Gross Domestic Product
Real GPD must be
measured to show the
actual increase in output
of the economy and not
the superficial rise like
inflation

36. Year
Price of Rice
per kg
Quantity of Rice
per kg
2012 50 12
2013 55 14
2014 60 16
Gross Domestic Product
Year
Price of Rice
per kg
Quantity of Rice
per kg
2012 30 100
2013 35 120
2014 40 140

37. Nominal GDP
Year Price per kg Quantity per kg
2012 30 100
2013 35 120
2014 40 140
Year Price per kg Quantity per kg
2012 50 12
2013 55 14
2014 60 16
t
3,000
4,200
5,600
600
770
960
LPG
Rice

38. Nominal GDP
Year Price per kg Quantity per kg
2012 30 100
2013 35 120
2014 40 140
Year Price per kg Quantity per kg
2012 50 12
2013 55 14
2014 60 16
t
3,000
4,200
5,600
600
770
960
LPG
Rice
3,600
4,970
6,560
LPG
Rice
Nominal
GDP

39. Nominal GDP
t
3,600
4,970
6,560
2012:
2013:
2014:
( - )
Year
Nominal
GDP
(Present Year –Past year)
Past Year
Formula:
(2-1)/1
Alternative:
2012
2013
2014:
3,600
4,970
4,970
3,600

40. Nominal GDP
3,600
4,970
6,560
2012:
2013:
2014:
Year
Nominal
GDP
Solution:
2014 6,560
( - )
3,600
2013
3,600
4,970
4,970
4,970
2012 2013
- :

41. Nominal GDP
3,600
4,970
6,560
2012:
2013:
2014:
Year
Nominal
GDP
Solution:
2012 2013
- :
3,600
4,970
( - )
3,600
38.05%
2014 6,560
2013 4,970
4,970

42. Nominal GDP
3,600
4,970
6,560
2012:
2013:
2014:
Year
Nominal
GDP
Solution:
2012 2013
- :
3,600
4,970
6,560
( - )
3,600
2013 2014
- :
4,970
( - )
4,970
38.05%
32.00%

43. Real GDP
Year Price per kg Quantity per kg
2012 30 100
2013 30 120
2014 30 140
Year Price per kg Quantity per kg
2012 50 12
2013 50 14
2014 50 16
LPG
Rice
Base Year
• Normal Economy
• No Problems
• Prices do not Increase

44. Real GDP
Year Price per kg Quantity per kg
2012 30 100
2013 30 120
2014 30 140
Year Price per kg Quantity per kg
2012 50 12
2013 50 14
2014 50 16
LPG
Rice
3,000
3,600
4,200
600
700
800

45. Real GDP
Year Price per kg Quantity per kg
2012 30 100
2013 30 120
2014 30 140
Year Price per kg Quantity per kg
2012 50 12
2013 50 14
2014 50 16
LPG
Rice
3,600
4,300
5,000
Real
GDP
LPG
Rice
3,000
3,600
4,200
600
700
800

46. Real GDP
t
2012:
2013:
2014:
( - )
Year (Present Year –Past year)
Past Year
Formula:
(2-1)/1
Alternative:
3,600
4,300
5,000
Real
GDP

47. Real GDP
2012:
2013:
2014:
Year ( - )
Solution:
2012 2013
- :
3,600
( - )
4,300
5,000
3,600
2013 2014
- :
4,300
4,300
19.44%
16.28%
3,600
4,300
5,000
Real
GDP

48. Gross Domestic Product
Deflator
• Changes in Prices
• Nominal GDP/Real GDP

49. Deflator
• Nominal GDP/Real
GDP
3,600
4,300
5,000
Real
GDP
3,600
4,970
6,560
Nominal
GDP
2012:
2013:
2014:
Year

50. Deflator
• Nominal GDP/Real
GDP
3,600 4,300
5,000
3,600 4,970
6,560
2012: 2013:
2014:
= 100% = 116%
= 131%

52. GROSS NATIONAL PRODUCT
It is the measure of ALL THE
FINAL GOODS produced by the
LABOR of a country in a specific
TIME PERIOD, including earnings
from ABROAD

53. GAWA
DITO SA
PILIPINAS
GAWA
NG
PINOY

54. GDP + Net income from assets in
other countries
GNP FORMULA = C + I + G + X +Z
CONSUMPTION + INVESTMENT + GOVERNMENT +
X(NET EXPORTS) + Z(NET INCOME EARNED BY
DOMESTIC RESIDENTS FORM OVERSEAS
INVESTMENTS MINUS NET INCOME EARNED BY
FOREIGN RESIDENTS FROM DOMESTIC
INVESTMENTS)
GNP

55. It measures the country’s
economic growth by dividing
the national income (GDP or
GNP) by the members of the
populations.
Per Capita GDP or
GNP

56. Per Capita GNP = GNP /
Population
Per Capita GDP = GDP /
Population

57. Contribution of
OFWs in GDP

58. Contribution of OFWs in
GDP
The contribution of Overseas
Filipino Workers (OFWs) makes the
GNP growth positive.

59. GDP
Remittances
Positive effects on the
economies of recipient
countries’

60. Remittances
Negative effect of the
recipient countries’
economy

61. The transfers provide a
country's economy with foreign
currency, help finance imports,
improve the balance of
payments in its international
accounts, and increase national
income.