ASSIGNMENT

Assignment

QUESTION 1

Introduction

System of National Accounts allows you to keep a hand on the economic pulse of the country. Various indicators that are included in national accounts, can measure the volume of production at a particular time and to disclose factors that directly determine the performance of the economy. Comparing the levels of national income over a certain period of time, we can construct a curve that characterizes the functioning of the economy in the long term: its rise or decline will affect the national income.

The information that gives national income accounts is the basis for forming and implementing public policies aimed at improving the functioning of the economy: the economy without such calculations would be based on intuition. Thus, national income accounts can be a table of the economic health of society and reasonably determine the policy, which would have helped to improve this health (Ranis, Stewart, Ramirez, 2000).

Gross National Product.

Economic theory and statistics to measure the volume of domestic production used a number of indicators, among which occupies an important place gross national product (GNP). BH? GNP is defined as the market value of all final products produced in the economy for the year. This takes into account the annual volume of final goods and services created by the citizens of this country, both within the national territory and abroad.

Another definition of GDP is the sum of profits for companies, organizations and people in the material and the material gross national product accounts, and depreciation. They are formed by the inclusion of the value of used capital goods into finished products. For a correct calculation of GDP must take into account all of the products and services produced in a given year, only once.

This avoids double counting and overstating the value of GNP. Many products are sold several times before they will be processed and will be included in the final product. Eliminate double counting enables value added, which represents the difference between sales and purchases of companies by firms of materials, tools, fuel, energy and services from other companies.

In other words, the value added - is the market price of company products, minus the cost of consumed raw materials purchased from suppliers (Barnes, Peter, 2005).

Summing up the value added by all enterprises, we can determine the GNP, which represents the market value of all outstanding products and services. The GNP includes:

1. Consumer spending

2 Gross private investment in the national economy

3. Government purchases of goods and services

4. Net exports, which represents the difference between exports and imports of the country.

GNP, on the other hand, is the amount of income individuals and businesses (wages, interest, profits, and rents) and is defined generally as the amount of remuneration of owners of factors of production.

GNP can also be defined as the sum of revenues of the national economy.

These are two mutually compatible approaches to the calculation of GNP. GNP, calculated on the income allocated to pay employees, rent ...