Economics Assessment Assignment Example | Topics and Well Written Essays - 1250 words

Economics Assessment - Assignment ExampleDevelopment of subject area accounts was necessary to supply detailed information that can be used by economists to rate the performance of the economyand to predict future growth. Macroeconomics depicts the interrelationship of various sectors of the economy with hearty effect on each other in case of decline or improvement in one sector. Macroeconomics generally shows the connection between home(a) income ac number and gross domestic products with mainly depends on savings and investment for long-term economic growth. Financial markets are what characterize savings and investment that witness growth in gross domestic product and living standards of the people in that particular country (Mankiw 581). National accounts enable a country to ballad down strategic plans for her economic progress in the future and on the other hand international developing institutions grant loans to developing countries to facilitate their development strat egies based on the national accounts of the country. Approaches of Measuring National Income National income is measured through a combination of output, expense and income approximations that have been generated over a precondition time period. The total value of goods and services produced, total expenditure by individuals and corporations in the economy with a combination of total income generated during production of goods and services during a particular year sums up the total national income. Gross domestic product measures value output produced although three approaches can be used provided the national output equals national expenditure and income. The modes used in calculating gross domestic product include expenditure method that sums up the total spending used on produced goods and services at current market prices. The spending includes exports and imports on goods and services, household, government and capital investments spending. The income methods can also be used by summation of profits of private sector, income of citizens, and land rent income. In general, its the total income earned through production of goods and services in the economy. The income excludes private beam of money, income not registered by customs and excise authority and transfer payment. Alternatively, gross domestic product may be arrived at through output method using value added concept. The totals are arrived at by adding together the output value produced in each sector of the economy that is considered productive. Valuation applies the use of step-up in product value at each successive stage during the process of production and it is referred to as value added approach, which is applied to avoid double counting intermediate goods value (Dwivedi 61). National incomes that Adopt International Standards Countries compile their national accounts using international standards such as SNA and ESA however, there are difficulties in comparison national income of differ ent countries. Difficulties remain in analyze national income internationally due to differences in income distribution such as the varying size of down in the mouth markets, which directly affects the level of income from goods and services. Government spending on defense also varies from one country to another thus posing difficulty in comparing national incomes concerning spending. Countries with significantly varying number of population are incomparable when using the income approach in