Narts

o aottCinculon fow LofTntome sinm anopen eOnt horm

Rfour Sector etonby.
A-Mt29 PHáuse bolsha aLSavn
A
a9

Gour
spencGng
9 C Lotfnancial
Grovernme
anon
Tox nt
Cconomy s xE bao nilamuMogkes
T

X-M frms învestmen tS

Pnce S

ENerg ecanormy ha foreign economic Telationg

involvinq Expartsoß Tmpots of Groods- Services,
Eoxelqn 'T nyearmeAtS,endinq borewin q
Expoxtsrof Croods &services as welt aj z
Tnvestments and Borob0ngiesuwtoin thehinfou foieign
ef monei ln&imilàrls4'althemportsoinvestments
hbxpad and lerdinqto other cOLNiesleadsto the
foug SectoY eCo Domss 1sta
ndpen aconom
Ldeats on thpthe restt of thei wirldbwe
ohere it
assume
that only house bolds and firmsdeal withthe
est of the world The household
expoxt abor 2

Servicoj and eceive a emeittintes, Similals the 3)

fixm expoxt and impoxt Groods services Both )
howebolds and irms will have a net export G)
(x-M) showinq the balance berween the' receipts 6)
Ond
payments huolued. Ner export s cauld be
positiv& and peganve.Taking net exparts of
-m) Balance of Yeceps L Pa
ments
both homeholds and frms the magnitude of ciYCuar
Hou uil) be more if X > M, it uoill be less if
X<M and it oil) be unaffected 1f x MTE
Savinq Tnv estMents Cs I) GoV eromeot
Expesditwe - Taxes (GT) and Exports * Tmport S
CX- M) there will be Equutibrium in a) the
sectorS In an Economq witn Grov ernmenk gectoY
and the foxeiqn Secto the fundamental identify
in an open economy will be h a
Ct I t G t NX
Since NationaJ Income (Y) is eithe_ consumed, Saved
paid oy taxeS to the CroveOMentwe have

Tn yeality In an economy there are nuuMerous of

markeS and several teakages therefoYe it itisiS
Teakaaes .
almost impossibte to have a simultaeo s
equiltbri um in a) the ma1kets.
 Measures of Naionadncomeg2!
CMeaSturementoiofrNationad aIocame
hanmsb
fineas
Nationa încame of asCountå isde hinhlLqo od
the
the total mak erhvauueof UL
Lo servicepxrnducedin the econamytduthg
a qen yeau Pgou atiomakin Corme1S
Acrdinq to AC Piqtea cómmuDi
thatipaYt ofaobjdchvecincomeofa the
CauYSesttincOTMe from absoad
ineludinq of Money Zhg
whichLc¯n behmeasured ifn

L LOa Methodgof meauing naianaliincomel

The concept of Naionáo income has thnee
interprerehongnsd
)Tota' value of
)Tota in come
S)Total expenditwe incurred
his implies thatthe vauúe off qgodRSeruicel
pxoduc ed in the economu must beequal to
tnesm ofp totaJ payments made to the.
F.O.P. in the form' of fact0Y Yefuns These
ot incone's become tneASouite ofrexpenditure
 iogner esport.
open ecb nomy Lonoralt

Prndueta aadta
GNPo CorossrNaion au
money valueofa cæL thet fna
T is a acounNysEa0sPoo
G eo prnduted
dtohereNertheyare dushgtne lqiven
iyear's Toother
period ofutime
09vtwrdGuhennet factoY from abroad
n CaTm e

Gt tNETA)S naddedrto Pwe qethNP

Lncome CCHI)
c auso knownas GoSSNaiona

R Ttome yeceived by domeAic factors toy thejr

Conibrion to poduction abriadt 322mo
Pri Paymenns maide toforeiqn fottors for atneir
Conribtnon to prnduoticminthe domestic coun
odtclhaunis NIGDPa t ATA

In cacclosedte con om GNT G0P CtTt C

2LASTNan openeconomy GNLGDaoo
This will depend on NIADf NEIA is posine
Kos TE NETAiSanegativetRK P)tneno

ME Ner National Piduct tNNe) ondNen Domestic

Prnduct (NDP)
The NNP and NDP are calclared by Subiactin
Depreciaticn from GNP and cDP Telpeciv ely
 Depeciahon is an allouance fox the amount of
Capital that has been used up fox theproduction
of Nationad euputiot2
Lu9dhroAoNNPGNPDepveciattonaotah
NDP GDP Depneciations

Rea GHI efers to GHI a constant prices ominal

(aGNT Yefers to Cr atcurrent pces when pices
Se even if there is no rea) inease in the
poduct1oncf and servicesthe nominal
GNI upil) iseSuch an incCreas ein GNI is not
Yeal qtbwth GND at Cuxent piceis de flated
bs usinq a pricedeflatar (Price Index) o Naticna
Income deftoter
Oo9 CNT Nomial GNIl00Sds

Gross Value Added ( V A ) t

3GVA S defi nedasa vadue of otput less the
added
Value of intermediate comumptionVatue
repreieNs the contnbuunon of Labor Capittal
to' the peoducticn pcesgs
ChreenNaionat TnCome- ore en Haional Income
index o£
measuUed asc CYe e COpCCrCrDP) is an
the enviODM enhtal
LecoTnomic qoth that measresconventiona GDP
efects on the 0fr the
into
gmwth
kcount the environmentl impoct
Tt ta kes GroPis
a counns is eConomic powth
COnvenhonaliGOp igure' adjusted fox the.
 Natonal
TncormeX) Product Expenditure
Tbe thYee measre) cfnationa inCame qve nse
ato the taple iident tyLo
D
Concep ts ofefonaionaJ incomea2
1)GOPDP S the moneya alueof at the
fin qo0dSeruicespoduced within the
bonicomesi ateritoofo a icoLLNYuduin duqi en
the
peribdof timequatter¡x a year Ttti
bufpt pnducedaaothinthen domesnciterm toxy
by
regardiks of whetn er teh it is pduced
9o9aLt
the cOunm's facto oT not.
af otadaD
Domenc temtus incudes
acrtetrnpilyingitnin thepoli ttcaahonieits
tettoia warers df thecountiy
anuincludinh Ships ndiaixcaftsLop eratod by the
0iidents of the eor Counmn betioeen tuo'o mere
3) fshi! vesseu cund oilocund ohatunah iqs2
mesidenrs
platfoxm$ operatêda byathe
foatng
) Embsiexcons arel cand militan establishment
abroad.
thar are otocotodabe
af thè counn
ce
hay no economic relaion wrth
A cowny wUhich
other counmes is knowna alecloSe ecenomy.
In a closed econo my
GDPCttGStban
 oeDuiYoDmentol costsofeconomiC gctivih e
okni Tt s a measlre af hou much a counmy
s pxepared for sutainble ecanomic
developinentSameSfobin nd Oitliam Nordhqu
uwere 20rliest eCODomiststo develop a qawth
model incorponathing envioMental chanq Tndia
&GDP iDitiaive envYOnMental
began its ehonge
Tndig beqan its GGDP initiative: in 2009
CaDP - fovionmentaliimpacts e en GoP)
Chee