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  • Econ 203 Chap 5

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    emma abissa
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    Gross investment equals net private investment plus depreciation. The income side of calculating GDP sums factor incomes including wages, interest, and business profits along with non-factor payments such as depreciation and taxes/subsidies to determine net domestic income at factor cost. The consumer price index measures changes in consumer goods prices while the GDP deflator reflects changes in prices of goods produced in a country, so their inflation rates can differ. Value added is the value of a firm's output minus the value of inputs purchased from other firms.

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    Econ 203 chap 5

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    Gross investment equals net private investment plus depreciation. The income side of calculating GDP sums factor incomes including wages, interest, and business profits along with non-factor payments such as depreciation and taxes/subsidies to determine net domestic income at factor cost. The consumer price index measures changes in consumer goods prices while the GDP deflator reflects changes in prices of goods produced in a country, so their inflation rates can differ. Value added is the value of a firm's output minus the value of inputs purchased from other firms.

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    2 views1 page

    Econ 203 Chap 5

    Uploaded by

    emma abissa
    Gross investment equals net private investment plus depreciation. The income side of calculating GDP sums factor incomes including wages, interest, and business profits along with non-factor payments such as depreciation and taxes/subsidies to determine net domestic income at factor cost. The consumer price index measures changes in consumer goods prices while the GDP deflator reflects changes in prices of goods produced in a country, so their inflation rates can differ. Value added is the value of a firm's output minus the value of inputs purchased from other firms.

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    Gross investment= net private investment+ depreciation

    The sum of wages and salaries, interest income, and business profits is called net domestic income at
    factor cost.
     
    The income side sums up the factor incomes and non-factor payments to calculate the GDP. The factor
    payments consist of wages and salaries, interest income, and business profits. Non-factor payments
    consist of depreciation (also known as capital consumption allowance)and indirect taxes less subsidies.
    The net domestic income at factor cost is equal to the sum of factor payments.
    >
    The two price indices measure different things. Movements in the CPI measure the change in the average price of
    consumer goods whereas movements in the GDP deflator reflect the change in the average price of goods
    produced in Canada. Hence,the two rates of inflation will very likely differ.
     
    >
    Value added is the value of a firm'soutput minus the value of inputs purchased from oth

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