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Help! Urgent! Seriously! (1 Viewer)

aero135

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im having trouble with calculating national income i dont understand it! Could some one please explain how it works and how the tables of income, consumption and investment are used to calculate national income!

I WOULD BE SO GRATEFUL IF ANYONE CAN HELP!

THANKS SO MUCH

god bless you
 

gnrlies

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well because you seem to be in a panic, I will say the following first:

Dont worry about doing this because it is not something you ever need to do in HSC economics. You only ever really need to know that AD = C + I + G + X - M and that in equilibrium Y = AD.

Now what I think you are trying to do is destroy your brains by going through the ABS national accounts and try to see how they all add up. Dont bother, waste of tiem. First of all from an accounting sense GNI is not the same as GDP. Gross National Income refers to GDP plus interest and dividends from abroad. In this sense you might find some difficulties using the C + I + G + X - M method.

Otherwise if you are trying to calculate GDP, then C + I + G + X - M should work. But I dont know for the life of me why you are doing this. If you could give me some background on what you are trying to do perhaps I can give some better advice.

EDIT:

Upon second reflection, it could be that you are dealing with multiplier questions? I.e. a rise in autonomous investment will increase income by X? Anyway, give me some more information because it is not enough to answer your question.
 

aero135

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SORRY MATE! yes i think its the " rise in autonomous investment will increase income by X" and how this is used to calculate national income

havent u seeen the tables in like trials man?
 

gnrlies

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Ok, well it is just the multiplier..

So if autonomous investment (or government spending, or autonomous consumption etc etc) increases by 100 and income increases by 300 then the multiplier is 3. You can use this to calculate any assosciated questions.
 

aero135

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can u please explain how to do this question!

What is the equilibrium level of income if

C + I = 130 + 0.4Y

how do u calculate this?
 

gnrlies

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For the benefit of others, equilibrium conditions : AD = Y or C + I + G + X - M = Y

So it is just a matter of substition (assuming C + I = Y)
 

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