1. Measuring Domestic Output and National Income
Chapter 7

2. Chapter 7 Table 7.1

3. Chapter 7 Table 7.2

4. Expenditure v. Income Definitions of GDP
Chapter 7 Figure 7.1
Expenditure v. Income Definitions of GDP
GDP = Y = C + Ig + G + Xn

5. Statistical Adjustments to the Income Definition of GDP
Wages + Rent + Interest + Profits
= NI, National Income NI
+ Depreciation
also called Capital Consumption Allowance (CCA)
or Consumption of Fixed Capital (CFC)
+ Net Foreign Factor Income (NFFI)
income of foreign workers and capital equipment used to produce U.S. GDP
but not resulting in any income for Americans
= GDP

6. Statistical AdjustmentsNI
+ Depreciation
+ Net Foreign Factor Income
= GDP
by the income definition
GDP = NI + CCA +NFFI

7. Gross v. Net Investment: Ig & In
Chapter 7 Figure 7.2
Gross v. Net Investment: Ig & In

8. Chapter 7 Table 7.3

9. Chapter 7 Table 7.4

10. “The Circular Flow of Payments”
Chapter 7 Figure 7.3
“The Circular Flow of Payments”

11. Chapter 7 Table 7.5

12. Chapter 7 Table 7.6

13. Chapter 7 Table 7.7

14. The GDP Price Index GDP Price Index = (Nominal GDP/Real GDP) x 100
Solve for Real GDP:
Real GDP
= (Nominal GDP/GDP Price Index ) x100

15. Chapter 7 Table 7.7

16. Historical GDP Price Index: http://research. stlouisfed
Historical GDP Price Index: Historical Consumer Price Index: