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University of Toronto Scarborough
Economics for Management Studies
Iris Au

1 ECMA06 National Income Measurement of National Income GDP Outline Why we want to measure output? The 3 approaches to measure national income: The expenditure approach. The income approach. The value-added approach. Other issues related to national income: Gross national income vs. net national income. GDP vs. GNP. Nominal GDP vs. Real GDP. GDP deflator. www.notesolution.com2 Why We Want to Measure Output? A measure of the countrys economic activity what kind of goods and services we produced? What are the levels of production? A simple way to measure our standard of living and compare it to other countries. How To Measure Aggregate Output We call the aggregate output as Gross Domestic Product (GDP) the total value of goods and services produced in the economy during a given period. There are 3 ways to measure GDP: 1) The expenditure approach Use by the government 2) The income approach 3) The value added approach www.notesolution.com
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