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    Thread: Gross national product and national income

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      Default Gross national product and national income

      Gross national product and national income

      In the analysis of economic variables are considered one of the most important variables, namely: gross national product and national income. These two variables level of performance of the economy better than they do any other variables.


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      Gross national (local) Gross Domestic Product:


      Can measure the economic activity of a country a number of ways, and among the most important of these methods is the total gross national GDP, which represents the market value Market Value of all final goods and services produced by the national economy over a specified period of time, usually years


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      The value of goods and services produced necessarily be equal to spend on these products, it follows that can be measured by the gross national product spent a total of sectors of national economy on various goods and services. In order to reach the total expenditure on final products Finished Goods, we offer the sales of total sales of intermediate goods (which are used in production and is not consumer) and the raw materials used in the production of final output.


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      To estimate the GDP as expenditure we are dividing the economy into four main sectors: households sector, the business sector, government sector, sector outside world (foreign), taking the total spending of these sectors on the final goods and services.


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      Deficit and the government surplus as a percentage of GDP the U.S. since 1950 to 2002

      Thus, receipts gross national product is the sum of personal consumption expenditure and gross domestic investment and government spending on goods and services and net exports of goods and services, or the so-called "net foreign investment".


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      Personal Consumption Expenditure:


      PCE represents the families spend on consumer goods (durable Durable Goods and non-durable) and services. Examples of durable goods cars, refrigerators, televisions, furniture and the like. The non-durable goods include food and beverages, clothing, cigarettes and other goods that perish in use for less than a year. Examples of services, spending on housing, education, health, entertainment and so on. And measured all of these expenses at market rates.


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      ∑ Total domestic investment Gross Domestic Investment:


      GDI is a newly produced capital assets and purchased by businesses and individuals, which include machinery and equipment acquired by enterprises, and new houses purchased by individuals. Just as consumers are the end-users of consumer durable goods and non-durable goods, the business is used for the final capital goods.


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      Government spending Government Expenditure:
      Includes the procurement of goods and services by government agencies at all levels: central and local. The newly produced goods sold by businesses to the government varies from office supplies to military aircraft and mechanisms. It also paid wages and salaries of state employees for their services in the administration of justice and care of security, education and so on.


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      Net Foreign Investment:

      The value of goods and services that we buy from abroad are imports Imports, and the value of goods and services we sell are the country's foreign exports Exports. These exports are part of the volume of goods and services we produce, generating income to those workers in their production.


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      The statisticians of national income by subtracting spending on imports of the total spending on goods and services and add the value of exports. The difference between exports and imports, which enters the gross national product is sometimes referred to as "net foreign investment".


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