Aggregates Tutorial Notes

University:
Stanford University
Course:
ECON 1 | Principles of Economics
Academic year:

2024
Views:

379

Pages:

1
Author:

larbi43100

Aggregates The PNNcf is equal to the national income (RN), that is to say the new wealth created and transferred to the country which will be distributed among economic agents. Compared to these aggregates, the most important and widely used are GDP and GNP. These are two very close and significant economic concepts, they serve as a standard to measure the economic wealth of a given country for a year, which allows a credible comparison in time and space. If the definition of economic aggregates is important, it is because it allows economists to observe the different uses of national production, in other words to see how the country's resources are used. It must be emphasized that each economic agent is at the origin of incoming and outgoing flows of an equivalent amount. For example, households receive income that they spend or save in full. The economic circuit as a whole is therefore characterized by the following equality: Resources = Jobs In terms of national accounts, GDP (Y) is divided into four groups: consumption (C), investment (I), public expenditure (G) and the trade balance (XM), where exports and M denotes imports; Y = C + I + G + (XM) The resource-employment balance of the nation is given by the accounting identity: R = E => Y + M = C+ I + G + Knowing that resources in a country come either from national production or from imports and the uses of these resources, called uses, correspond to expenditures.