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AS Economics
Tutor2u &
Mrs G
What is National Income?
Tutor2u &
Mrs G
Why is national income important?
Your task
• Australia • Netherlands
• Belgium • People's Republic of China
• Brazil • Russia
• Canada • Saudi Arabia
• France • South Korea
• Germany • Spain
• India • Sweden
• Italy • Switzerland
• Japan • Turkey
• Mexico • United Kingdom
• United States
Tutor2u &
Mrs G
Countries with largest GDP in 2005
2005 2006
• Gross world product
World economy 44,433,002
European Union 13,446,050 48,245,198
• European Union 14,609,836
Tutor2u &
Mrs G
Gross Domestic Product (GDP)
So which C G I Stocks X M AD
‘stock’ 1996 552.9 183.2 128.6 1.9 209.9 198.3 880.9
makes up
the largest 1997 572.8 182.3 137.1 4.0 227.2 217.7 908.7
% of AD? 1998 595.7 184.3 154.9 4.9 234.2 237.9 938.1
Tutor2u &
Mrs G
GDP by Factor Income
Tutor2u &
Mrs G
GDP by Factor Income (2)
• Welfare benefits
are excluded
from the income
approach to
calculating
national income
• This is because
welfare benefits
are simply
transfers rather
than a reward
for factors of
production
Tutor2u &
Mrs G
GDP by Value Added from each Sector
Tutor2u &
Mrs G
Sectors of the economy
Tutor2u &
Mrs G
GDP and GNP
Tutor2u &
Mrs G
GDP and GNP
Tutor2u &
Mrs G
Limitations of national income data
Tutor2u &
Mrs G
Shadow economy….
Tutor2u &
Mrs G
Uk statistics ….June 2007
Tutor2u &
Mrs G
GDP per capita in 2004
GDP per
capita
Luxembourg 57 704 EU15 28 741
United States 39 732 Germany 28 605
Norway 38 765 Italy 27 699
Ireland 35 767 Spain 25 582
Switzerland 33 678 Korea 20 907
United Kingdom 31 436 Czech Republic 18 467
Canada 31 395 Hungary 15 946
Australia 31 231 Slovak Republic 14 309
Sweden 30 361 Poland 12 647
Japan 29 664 Mexico 10 059
France 29 554 Turkey 7 687
Tutor2u &
Mrs G
GDP per capita of the world
Tutor2u &
Mrs G
Percent poverty world map
Tutor2u &
Mrs G
HDI – Human Development Index
• Try to work out why a GDP’s ranking is not always its HDI
order
• Read unit 25
• P158 – do Q 3 & Q4
Tutor2u &
Mrs G