FDNECON 02 · Measuring Output and Equilibrium

₱760 billion.

NX = 90 − 130 = −₱40bn. GDP = 500 + 120 + 180 − 40 = ₱760bn. Adding imports instead of subtracting them, or ignoring them, counts foreign-produced expenditure as domestic output.

To remove foreign-produced content from total spending and retain domestic production.

C, I and G may contain foreign goods. M removes that foreign production once. The subtraction is an accounting boundary, not a verdict about whether trade benefits consumers or producers.

A new home is investment; existing-share purchases and cash transfers are not current final production.

The lecture includes new housing with capital formation. Buying an existing financial claim changes ownership, while a transfer is not payment for current output. A later goods purchase is assessed separately.

It transfers purchasing power without purchasing current goods or services.

G measures government purchases of current output. A transfer does not itself buy output; subsequent consumption by its recipient can enter C. Counting the transfer as G and the later consumption as C would confuse the events.

₱500.

Value added is 120 + (300 − 120) + (500 − 300) = ₱500, matching the final sale. Summing all sales to ₱920 counts intermediate value repeatedly.

Use current output quantities with base-period prices instead of current prices.

The fixed-price calculation holds the price basis constant so quantity changes drive the comparison. A CPI basket instead holds consumer quantities fixed; do not swap the two exercises.

Nominal GDP rises 20%; real GDP is unchanged.

Nominal output value rises from 50(20)=₱1,000 to 50(24)=₱1,200. Real output valued at the ₱20 base price remains ₱1,000, so there is no quantity growth.

Its production occurs within the domestic economy; ownership is a different boundary.

Domestic output is identified by where production occurs, not by the nationality of its owners. Income flowing across borders becomes relevant to national-income adjustments rather than relocating the factory’s production.

₱940 billion.

GNI/GNP = GDP + net factor/primary income from abroad = 900 + 40 = ₱940bn. This bridge is distinct from subtracting imports in NX. The reviewer explicitly flags the lecture’s conflicting shorthand.

Gross output includes capital consumption, so depreciation bridges from net income components to a gross total.

The lecture’s worked calculation includes depreciation. It is a gross-versus-net adjustment, not a second sale, a wage payment or an item of foreign trade.

₱730 billion.

Add the six supplied components: 400+50+30+150+40+60=₱730bn. Omitting depreciation gives ₱690bn; omitting indirect taxes gives ₱670bn. Boundaries and completeness are explicit.

They measure the same production from different sides, so adding them counts it twice.

Purchases of output become income for suppliers of productive resources. With consistent definitions, the methods provide alternative measurements or a consistency check, not separate production to sum.

NX concerns exports minus imports of goods/services; foreign factor income concerns cross-border income receipts minus payments.

Trade flows and income flows answer different questions. Substituting one for the other confuses the expenditure identity with the bridge between domestic and national measures.

₱9,000.

Current real GDP = 100(80)+20(50)=₱9,000. Current nominal GDP would be 100(100)+20(60)=₱11,200. Real valuation uses the base prices for all current quantities.

₱250.

Value added = output − intermediate consumption = 700 − 450 = ₱250. The ₱700 final value already includes those inputs, so adding the input purchases would duplicate their production.

No; wages are income-side information and would duplicate production already represented by expenditure.

Select one consistent measurement approach. The wage subtotal is not an extra expenditure component; combining it with C+I+G+NX would mix two perspectives on the same output.