Measuring GDP using the Income Approach and the Expenditure Approach - HD
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- เผยแพร่เมื่อ 14 ต.ค. 2024
- GDP is generally understood to represent the health of a nation's economy, and most people realize that if GDP is growing, things are going well, while if it's falling things have turned sour in the economy. But what, precisely, does GDP measures? There are two primary methods for measuring GDP, which should yield the same result even though they measure completely different factors.
-The income approach: measures the total incomes earned by households in a nation in a year.
-The expenditure approach: measures the total amount spent on the goods produced by a country in a year.
By examining the circular flow model of a nation's economy, we can demonstrate why every dollar earned by a household in a nation's resource market will ultimately be spent in the product market, or leaked through taxes, savings, and import spending, leading to injections in the form of government spending, investment and export sales.
In the video lecture below, the two methods for measuring GDP are introduced, and the various components it includes are explained in detail.
Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! econclassroom.c...
Usually I don't make comments......but here I can't stop myself but to appreciate this one.
The only video that made me properly understand how GDP is measured with the Income approach!
ربنا يخليك لينا يا اسطا، دانا منغيرك زماني سقط
you explain better than my teachers at school, thank youuuuuu
The best video about GDP measurement.
Agreed, I feel confident going into exam today lol
word
So thankful for these videos!!! I kept reading my book and just couldn't get it, so thank you!
One of the best Economics videos available on TH-cam, very confident approaching my exams!
thank you for a simple to understand lesson.
you helped shorten the hours spent studying.
Preparing to teach basic economic concepts - national income, circular flow etc and found this really helpful in terms of a way to explain this clearly - many thanks
This one video is pretty much everything you need to know, brilliantly explained.
Wow, this was such a better explanation than my instructor. This answered every one of my lingering questions and even explained things I didn't know I didn't understand well. So very happy to have found this before my exam. Thank you!
hy, Madam have you any idea how is lm model application?
if u hv then help me i m failed to understand how this model work?
These videos are genuinely excellent I'm sure people learn more thanks to videos like these than they do in lectures
Thanks for this video. I have a question :I don't understand the example on the t-shirt buy in China . if i buy a product in a foreigner market how the money spent will return in US by export ? assuming that in the video we say an import is leakage in the cycle.
Can this method be done at a city/district level
This is probably the best explanation on GDP. Concise, simple & informative :)
So simple. Thank you so much. What software did you use to give this explanation???
Wow! This is literally the best video for measuring GDP and circular flow! Love the content!! Thank you!
thank you for explanation! but I still can not understand why it is said that household earned in the resource market ultimately is spent in the product market？ I think they may save some money, and invest to the firms instead of buying goods in the product market.
A brilliant explanation! Thank you!
best explanation of gdp calculation. comprehensive yet simple
Great lecture series Jason.
thanks man, was really helpful for my midterm
Beautiful explanation.. I also want to know the product approach. Thanks a lot
Thank you very much. I have spent days trying to understand this but did not until today. Really appreciate you.
Awesome, clear and understandable
Thanks, this is completely what I was looking for
One of the best teacher on economics
Your explanation is good enough to teach at any age. Thank you.
I think we need a clarification @9:00. Some government spending should be excluded in GDP calculation such as social security payments and welfare payments. These spendings are called "Non-production transactions."
I believe the best way to measure a nations economy is to factor it's GDP, it's export/imports and it's external debt. If I can come up with an equation representing this factors I am certain a better comprehension of an economy can be illustrated. But the GDP portion my need to be tweaked. In any case please tell me what you think.
Very clear, precise and coherent. Thank you.
Ah the classic income and expenditure approach. Makes me miss teaching!
Thank you for clearing my doubt and making this easy to understand.
very good explanation. did u study in St. Gallen?
Why are taxes collected by the government not accounted in the income approach method ?
It nice Presentation about GDP. thank you
This taught me more than my prof does in 2 weeks of lecture. College is pointless and expensive.
Love your work n teaching skills,
U made it very Simple and Easy.!
In which category public corporate and sales taxes should be included?
Since transfer payments (welfare) isn’t part of GDP but financed through taxation, shouldn’t taxation be recorded as Government income?
Thanks for the great walkthrough!
Hi Jason please make videos on econometrics.. yo u really did a great job... cheers
Brilliant, very simplified and easy to understand
Macroeconomics tomorrow and you just saved my life!! Thumbs upp professor :))
How was the exam?
@@shockwave2477 lol i dont think hes gon reply after 7 years
No, you can’t prepare for exam from one TH-cam video.
Thank you sir I am very helpful for this vedio
I am from science background. But the way of explanation help me a lot to understand about GD.. thanks a lot Sir
Is expenditure and income approach should the same output or must be veryical?
Excellent video
tnx for the video..
sir do you know where to get those data for me to compute the gdp or estimate the future gdp of a certain country like the US or Eu? any online resources?
why we add depreciation in GDP when we calculate by income approach?
Awesome! thank you so much... every well explained!
Most usefull and effective video to understand the GDP of a country.
It is an amazing video for understanding the method of calculating GDP. It would be great if you could explain how a government calculate in reality? Where they collect the data? How to estimate the deviation of calculation?
Wow...you made the understanding very easy and simple❤👏👏
Hello, great vid. I would love, if you have time, a copy of your flow diagram, i cannot find anything like it.
In summary in this video clip, income= expense. Is it correct? I am not sure. As I know, income - expense = profit or Loss. So the way to measure GDP by income appoarch and expenditure approach is not equal. That 's why 2 countries have the same number of GDP but one has national debt. Another has not.
And one more thing, government get money from
1. Tax ( normal way)
2. Borrow ( called bonds)
3. Just print money (called QE)
awesome. keep it up sir!
Excellent video.. Thank you so much
Great job
Countless thanks for magical explanation 👍🏼
How are direct taxes treated in GDP by income method
its very good learn
May I ask about the third approach which is Output Approach?
Totally helped to get through my econ assignments.
You're a life savior.....my economic Jesus Christ!
profound and clear explanation of GDP. thank you!
How do one calculate GDP in a Cummunistic economy?
thank u...that's the best video to understand Gdp mesurmt
Sir i am your new subscriber...👍
finally understood GDP
WELL DONE AND THANKS
thank you for this! I really learned a lot!
Could some one help me get this straight in my head. At the end of the video he states all money spent on imports will always come back as reciprocal money spent on exports.
Is this really true.
I thought if imports are bought the foreign country receives foreign exchange which would be changed into their domestic currency but not come back to as goods.
I've always thought of imports as a "permanent" leak of domestic expenditure.
very well explained
nice video
Only money in the flow chart is calculated in the gdp ?
Thank you sir
Is it arguable that Household-Consumption on the Expenditure side covers almost everything in the Income Approach to GDP alone? Since money is only spent or saved wouldn't that cover all total income? If that is all true, isn't the expenditure side superior because it also incorporates the government and foreigners where as the Income side does not. Any help is appreciated.
Thanks 😊 it's very helpful.
Thank you and God bless you and your family real good in Jesus mighty name for this good work. Amen.
Excellent upload
great video...helped me alot
Very helpful ,thank you .
Awesome video. Really helped me. Thank you :)
Thank you! This helped me out a ton!
awesome !! I got it finally (thumb up)
Concepts clear. Thank you so much.
i understood this more than my macroeconomic teacher greeting from me to you i appreciate your efforts
Take for example our trade deficit. If we import more then we export a problem arises, it incidentally causes more demand for money that is not available and now there is less money in banks and in peoples pockets. So while it may look like the nation is healthy becuase people are spending the real question is where is the money going. In the case of a trade deficit the money is now going abroad. This,in my view,fails the GDP concept. Would you agree?
thank you so much , great explanation!!
Thank you sir, it was extremely useful.
thanks a lot
Thank you. Crystal clear
Very helpful! Thank you so much.
thanks
Thank you. It was refreshing.
Thanks for a great lesson
I comprehend the theory of GDP, but I don't see how this theory represents a nations economy. The theory is based on consuming and spending which if you think about it leaves less money in the bank, less money in the bank means less lending, but more money in circulation which means less money in peoples' pockets, which in turn means a leak in the circular flow in the form of buying raw materials from abroad or a labor shortage or a labor influx all which have a negative impact on the cir. flow?
Thanks for that lecture!
Thank you, well presented.
Thanks Alot....
Thank you, it was really useful.
what about households save their money at their home?
thanks so much for this video