# Tag Info

Accepted

### Multivariate implicit differentiation (Samuelson, 1948)

We start from the equation: $$Y = C(Y - \overline{W}) + \overline{I} + \overline{G}$$ First, we totally differentiate with respect to $(-\overline{W})$ (taking into account that $Y$ is a function of ...
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### Does GDP Income Approach hold?

Using the income approach, GDP is the sum of compensation of employees, gross operating surplus, gross mixed income, and taxes less subsidies on production and imports. Gross operating surplus ...
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### Does National Savings equal zero in a closed economy? Please give an economic intuition

In a closed economy, savings equal investment. Your equation actually shows this. We have: $Y−(C+G) - I = 0$. Note that savings, by definition, is just equal to the production $Y$ that is not ...
• 6,148
Accepted

### GDP Identity:Why does $\text{C+S+T = C+I+G+(X-M)}$?

A concrete example makes it easier to think about: Let's say during the week you receive \$1000 income. Only 3 things can happen to your$1000: You could be taxed some/all of it (T: Tax) You could ...
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### Does GNI change once it has been published?

GNI is GDP plus net primary income from abroad Any such numbers are subject to revision as more information is obtained; in many countries such numbers are typically revised every three months as ...
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### Why real wage equals marginal product of labor when return to scale is constant?

Consider that the following production function $Y=F(K,L)$ excibits constant returns to scale ie $F(x K, x L)=x F(K,L)$, for any arbitrary scalar $x$. This means in plain English that eg for $x=2$, ...
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Accepted

### Estimating national intangible wealth

The reference is World Bank (2006). You can see the detail of the methodology in Appendix 1, and their estimates of intangible wealth in Appendix 2. There are other methodologies to measure ...
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### Inventory based question

"If a firm produces 1000 shirts (finished products), expecting to keep an inventory of 100 shirts at the end of the year." Here Why a firm keep an inventory of 100 shirts ? Expectation is different ...
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### National income referred as GDP?

GNI is simply a new name for GNP. It is GDP plus net primary income from abroad (i.e. with primary income paid abroad treated as negative). Primary income is described in Chapter 11 of the IMF BOP ...

### National income referred as GDP?

The degree of precision with which the various terms for these economic aggregates are used may vary with the context. But if one is trying to be strictly correct, three distinctions should be borne ...
• 8,369
Accepted

### Why does Denmark have such a huge disparity between its income and wealth Gini coefficients?

The disparity exists because a high income taxes level income inequality but do little to fix wealth inequality. Wealth inequality is always higher than labor income inequality, due to income ...

You largely answered this question yourself: you provided this reference to a Gennero Zezza paper: (link to paper) Zezza states in the second paragraph that most of the thinking about the Paradox of ...
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### Why doesn't national savings, in aggregate, always equal to zero in monetary terms?

I think this boils down to misunderstanding what saving in macroeconomics is. Saving does not cancel each other out. In closed economy, private saving is difference between income (which is by ...
• 56.4k
Accepted

### Multiplier effect and GDP

You can't apply it to the national income identity directly because its components, namely consumption, investment and imports are functions of national income (output) and hence, they are not ...
• 56.4k
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### Confusion in the relationship between GNDI and GNI

No, taxes are either: used for transfers between individuals. One person has less to spend on consumption or investment but other person has more. government income also counts as a disposable income ...
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### Is unemployment benefit part of national income measurement?

It is included. It is a transfer payment, so the trick is to ensure that the income flow is only counted one time in the national accounting. Statistics Canada, National Gross Domestic Product by ...
• 9,907
1 vote

### Why does HDI use log-transformed data for income index?

Decreasing returns to standard of living means that if you add a certain amount $\delta$ to the income of a low income person, then the increase in her standard of living is bigger than if you would ...
• 12k
1 vote

### In a 3 sector economy, calculate maximum possible share of one of the sectors over time if initial sectoral composition and annual growth rate given

The problem is soluble by taking your formula for the industry sector share $f(t)$ at time $t$ and differentiating with respect to $t$ to determine its gradient at $t$, with the maximum where the ...
• 8,369
1 vote
Accepted

### Is the economic output of the British crown dependencies included in Britain's national income?

The UK economic territory excludes Crown dependencies (Channel Islands and the Isle of Man) (see here, page 12, bottom section) So, the crown dependencies' income is not counted in the UK's domestic ...
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1 vote

### National income intermediate consumption

Because by definition it is. Intermediate consumption: Intermediate consumption is a national accounts concept which measures the value of the goods and services consumed as inputs by a process of ...
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1 vote

### Does "I" in Y = C + I + G + X - IM refer to the domestic investment?

I see your confusion that could also apply to $C$ and $G$ because Mankiw starts from $$Y= C^d+I^d+G^d+X~~~~~ (1)$$ $C^d$, $I^d$, and $G^d$ have been subjected to the ...
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1 vote
Accepted

• 33.8k
1 vote

### Why don't we draw National Income Curve(45 deg. line) simultaneously with graph for Saving Function?

The role of 45 degree line while showing a consumption function is that the 45 degree line translates the values on x-axis to equal values on y-axis. The consumption function is drawn on an income and ...
1 vote

### Is the BEA double counting benefits in Personal Income?

Statistical Agencies do not necessarily obey the habits of Economic Theory. There is no "mistake" here (certainly, there is no double-counting), but a different approach to what each concept means or "...
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