National Income / Gross National
National Income
Gross National
National output is the total value of final goods and services produced by a country within a year. It is a tool to measure the performance of economic activity.
Significance of Study of Income / Gross National
Standard of living indicators.
Indicators of economic growth.
Indication of the effectiveness of government economic policy.
It is a tool to measure the performance of economic activity.
Provides an overview of
- conditions of employment opportunities
- how the factors of production
- unemployment
- levels of welfare and standard of living.
Enabling economic planning unit to take follow-up actions.
Employment and Unemployment
Labor
Total population in working age 15-64 years who are working or are actively seeking employment. Excludes homemakers and SPM / STPM because they do not actively working or actively seeking work.
Labour Force Rate = (Total Labour Force / Total Population) x 100%
Labour Force Growth Rate = [(Labour New Labour - Labour Force Original) / Labour Force Original] x 100%
Employment
Employment is the labor involved in economic activities to produce goods and services.
Employment is the total labor force is unemployed.
Employment is the total labor force that is used productively in the country's output.
For example, the total labor force was 1.2 million people, so if just 1 million get jobs, this means that employment is of a million people.
Employment = Labour Force - Total Unemployed
Increase employment means
- Number of unemployed decreased.
- National Income / Gross National rose.
- Living standard of the people rose etc.
Employment Rate = (Employment / Labour Force) x 100%
Employment Growth Rate = [(Employment Development - Employment Original) / Original Employment] x 100%
Employment significant increase in rates
- The unemployment rate declined.
- Increasing economic achievements.
Unemployment
Unemployment is the labor force who want and are willing to work but have not yet found a job.
Economic problems in which a number of labor willing to work does not get a job.
The causes of unemployment:
- Replacement of labor with machines.
- industrial backwardness.
- economic recession, etc..
Total Unemployed
Total unemployment is the total labor force willing to work but not seeking employment.
For example, the total labor force was 1.2 million people, so if only 1 million people employed, this means that the number of unemployed amounted to 0.2 million people.
Unemployment Rate
The unemployment rate is the rate per cent of the total labor force is employed to total labor force.
For example, if the total labor force was 1.2 million and the number of unemployed was 0.2 million people, this means that the unemployment rate is 16.7%.
Unemployment Rate = (Number of Unemployed / Labour Force) x 100%
Decrease the unemployment rate means
- rate of employment increased
- national income / output of the country increased
- increased economic performance.
Economy to achieve full employment when the unemployment rate at 4% or less. While full employment, a large number of unemployment only in the form of frictional unemployment.
Research Interests Employment / Unemployment
- Ensure supply of adequate skilled labor to the ever increasing national productivity.
- Increase the national output / income countries and thus increase economic growth.
- Increasing income per capita and increase the prosperity of society and the welfare of the population.
Inflation
Inflation Definition
Inflation is the increase in general price level of goods and services occurs as a whole and continuous.
The inflation rate determines the general price level stability measurements.
General price is the average price of all goods and services in the market in the country.
Causes of Inflation:
- excess of current expenditure in the economy with full employment.
- increased costs of production.
- higher import prices.
The effect of inflation on the economy:
- Raise the price of export goods.
- Decrease the purchasing power of money.
- The decrease standards of living.
- Individual real income decline.
- Increase the cost of living.
Inflation and Consumer Price Index
- The consumer price index (IH) measures the general price level.
- IH for the base year (year comparison basis) set as 100. If new = 105 IH-year, inflation
= [(IH New Year - IH in the original) / IH in the original] x 100%
= 5 / 100 x 100%
= 5%.
Inflation Research Interests
- Measure the general price level stability.
- Measuring changes in living costs.
Balance of Payments
The financial statements of all transactions and capital flows between countries with the rest of the year.
Balance of Payments Current Account Balance = Balance + Finance + Errors and Omissions
Importance of Balance of Payments Survey
Favorable balance of payments surplus in the country
- increase the country's foreign exchange reserves.
Decrease (deficit) balance of payments loss to the country because:
- reduce the country's foreign exchange reserves.
- affect the stability of currency values.
- reduce the country's economic activity.
The government had to intervene in the economy through direct control, etc..
Economic Growth
Economic growth is the physical form of economic development such as increased output of goods and services, increase infrastructure and other economic development. It is a tool to measure the performance of national development.
Economic growth is an increase in economic activities that lead to product (GDP) in the economy.
GDP is the value of goods and services produced within a country according to fixed prices in the base year.
Measuring the economic development of physical performance such as the increase in output of manufactured goods, infrastructure development, etc. The number of schools.
Economic growth = [new-year real GDP - real GDP in the original) / real GDP in the original] x 100% (a more appropriate measurement for an increase of output in the country) or
Economic growth = [GNP is the new year - real GDP in the original) / GNP is in the original] x 100% (measurement that is not suitable for including the increase in output abroad)
Economic growth is calculated as a fixed price basis in order to avoid the influence of inflation.
Importance of the Study of Economic Growth
Create more new jobs to the increasing population.
Growth of Welfare
- The increase in living standards.
- Increased when the Per Capita Income (PPK) is increased (when the increase in national income is exceeding population growth).
- PPK is the average income in a country's population according to fixed prices in the base year.
- Welfare Growth = [(PPK is a new year - PPK is in the original) / PPK is in the original] x 100%
Importance of Growth in Welfare Studies
- Economic growth is not necessarily followed by the growth of welfare / rising standard of living of the population because the percentage increase may exceed the percentage increase in real GDP, the standard of living does not rise but fall.
- In addition, economic growth is only taking into account the increase in output (GDP) without regard to other factors that can determine the composition of the living standards of such products, income distribution, and negative externalities.
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