Here we have explained macroeconomics explains the key concepts of national income accounting. It contrasts macroeconomics with microeconomics and highlights the circular flow of income within an economy. The text describes the three primary methods for calculating national income – product method, expenditure method, and income method – and explains how each method accounts for various economic factors like depreciation, inventories, and government spending. The excerpt also defines several important macroeconomic variables, including Gross Domestic Product (GDP), Gross National Product (GNP), Net National Product (NNP), and National Income (NI), and discusses the limitations of using GDP as a sole measure of national welfare.

Ver todos los episodios