CHAPTER
8
MEASURING GROSS
DOMESTIC OUTPUT
AND
NATIONAL INCOME
ACCOUNTING
, Topic Learning
Outcomes
At the end of this topic, student should
be able to explain:
1. The circular flow of income diagram
2. The three methods of national income
accounting.
3. The various concepts of national
income.
4. The uses and problems of national
income statistics.
, National income
The total market value of all final goods and
services produced by the country’s citizens
during a given time period, normally for one
year.
National income accounts are used to determine
the current performance of the economy.
, Circular-flow
diagram
A visual model of the economy that illustrates
how households and businesses interact
through markets for products and markets for
resources.
Economic sectors:
the household sector: buyers (consumers)
the business or firm sector: sellers
(producers/firms)
government sector
foreign or the international sector.
8
MEASURING GROSS
DOMESTIC OUTPUT
AND
NATIONAL INCOME
ACCOUNTING
, Topic Learning
Outcomes
At the end of this topic, student should
be able to explain:
1. The circular flow of income diagram
2. The three methods of national income
accounting.
3. The various concepts of national
income.
4. The uses and problems of national
income statistics.
, National income
The total market value of all final goods and
services produced by the country’s citizens
during a given time period, normally for one
year.
National income accounts are used to determine
the current performance of the economy.
, Circular-flow
diagram
A visual model of the economy that illustrates
how households and businesses interact
through markets for products and markets for
resources.
Economic sectors:
the household sector: buyers (consumers)
the business or firm sector: sellers
(producers/firms)
government sector
foreign or the international sector.
