ECO 1102 Lecture Notes - Lecture 6: Net Domestic Product, Gdp Deflator, Deflate

• School: University of Ottawa
• Department: Economics
• Course: ECO 1102
• Professor: David Gray

Document Summary

(factor) income approach = tracking earning activity. > aggregate income was k per year in 2011. Ndp (net domestic product) = factor incomes + indirect taxes. Gdp (same as y) = ndp + depreciation (capital consumption allowance) Indirect taxes (e. g, pst, gsp , hst) (incurred only upon act of purchase) (part of ndp) Depreciation = what is required in order to maintain the capital stock in its existing condition. > it"s possible for one economic agent to earn income from land, labour, and/or capital simultaneously. > so, it"s not the identity of the earner that matters, but the manner/source in which the income is earned. > gdp (calculated by the expenditure approach) should equal y, as calculated by the factor income approach. > gdp = y or gross domestic product =national income. > real gdp is adjusted for inflation, nominal gdp isn"t. > real gdp isn"t influenced by prices changes, but normal gdp is, real is more accurate.