Measuring GDP using the Income Approach and the Expenditure Approach - HD

GDP is generally understood to represent the health of a nation's economy, and most people realize that if GDP is growing, things are going well, while if it's falling things have turned sour in the economy. But what, precisely, does GDP measures? There are two primary methods for measuring GDP, which should yield the same result even though they measure completely different factors.
-The income approach: measures the total incomes earned by households in a nation in a year.
-The expenditure approach: measures the total amount spent on the goods produced by a country in a year.
By examining the circular flow model of a nation's economy, we can demonstrate why every dollar earned by a household in a nation's resource market will ultimately be spent in the product market, or leaked through taxes, savings, and import spending, leading to injections in the form of government spending, investment and export sales.
In the video lecture below, the two methods for measuring GDP are introduced, and the various components it includes are explained in detail.
Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! econclassroom.c...

[@drgunit893]

The only video that made me properly understand how GDP is measured with the Income approach!

[@manojkumarpandey2992]

Usually I don't make comments......but here I can't stop myself but to appreciate this one.

[@veld66]

One of the best Economics videos available on UA-cam, very confident approaching my exams!

[@lilyasser7785]

ربنا يخليك لينا يا اسطا، دانا منغيرك زماني سقط
you explain better than my teachers at school, thank youuuuuu

[@NourEldin21P]

دا انقذني في ال Microeconomics كان فاضل يومين وانا معرفش اي حاجة عن المنهج اللي داخل في الامتحان وجبت 44/60 في الفاينل وجبت B- في المادة

[@floopy312]

The best video about GDP measurement.

[@MrKelvinag]

Agreed, I feel confident going into exam today lol

[@engagekem2586]

word

[@charlotteaates4376]

Preparing to teach basic economic concepts - national income, circular flow etc and found this really helpful in terms of a way to explain this clearly - many thanks

[@truerealpearl7781]

So thankful for these videos!!! I kept reading my book and just couldn't get it, so thank you!

[@darktheme2192]

thank you for a simple to understand lesson.
you helped shorten the hours spent studying.

[@mrs.m.w]

Wow, this was such a better explanation than my instructor. This answered every one of my lingering questions and even explained things I didn't know I didn't understand well. So very happy to have found this before my exam. Thank you!

[@muhammedusman8442]

hy, Madam have you any idea how is lm model application?

[@muhammedusman8442]

if u hv then help me i m failed to understand how this model work?

[@lukasbaral5108]

This one video is pretty much everything you need to know, brilliantly explained.

[@theasmrgamerunexposed2251]

These videos are genuinely excellent I'm sure people learn more thanks to videos like these than they do in lectures

[@Joshuaquilina]

Macroeconomics tomorrow and you just saved my life!! Thumbs upp professor :))

[@shockwave2477]

How was the exam?

[@danaaron1]

@@shockwave2477 lol i dont think hes gon reply after 7 years

[@vkrgfan]

No, you can’t prepare for exam from one UA-cam video.

[@chrisralte]

This is probably the best explanation on GDP. Concise, simple & informative :)

[@atulnagargoje6337]

One of the best teacher on economics

[@elengrigoryan5446]

A brilliant explanation! Thank you!

[@herifinamcasi]

thanks man, was really helpful for my midterm

[@sooweichan3501]

Wow! This is literally the best video for measuring GDP and circular flow! Love the content!! Thank you!

[@MN-ne7ee]

best explanation of gdp calculation. comprehensive yet simple

[@bhaskartarafdar1560]

I am from science background. But the way of explanation help me a lot to understand about GD.. thanks a lot Sir

[@JohnHaIo]

This taught me more than my prof does in 2 weeks of lecture. College is pointless and expensive.

[@richbrainedutv]

Thank you very much. I have spent days trying to understand this but did not until today. Really appreciate you.

[@Jramirez07062001]

Your explanation is good enough to teach at any age. Thank you.

[@ukemeedem255]

Thanks, this is completely what I was looking for

[@bottomupengineering]

Great lecture series Jason.

[@williamp9117]

Can this method be done at a city/district level

[@theperfectcelibate8669]

Most usefull and effective video to understand the GDP of a country.

[@WTFicey]

Very clear, precise and coherent. Thank you.

[@delfinapacho1823]

Awesome, clear and understandable

[@Moon1stJan]

Thank you for clearing my doubt and making this easy to understand.

[@tierneyeducation]

Ah the classic income and expenditure approach. Makes me miss teaching!

[@tl9150]

Thanks for the great walkthrough!

[@michaelsadek4449]

i understood this more than my macroeconomic teacher greeting from me to you i appreciate your efforts

[@damithSL]

Totally helped to get through my econ assignments.
You're a life savior.....my economic Jesus Christ!

[@asnakew21tarekegn27]

It nice Presentation about GDP. thank you

[@fernandemessanga4938]

Thanks for this video. I have a question :I don't understand the example on the t-shirt buy in China . if i buy a product in a foreigner market how the money spent will return in US by export ? assuming that in the video we say an import is leakage in the cycle.

[@نائلنعمان]

finally understood GDP
WELL DONE AND THANKS

[@harismir4461]

Love your work n teaching skills,
U made it very Simple and Easy.!

[@freeway7979]

I think we need a clarification @9:00. Some government spending should be excluded in GDP calculation such as social security payments and welfare payments. These spendings are called "Non-production transactions."

[@sandiledayi4076]

Brilliant, very simplified and easy to understand

[@biplabsing56]

Thank you sir I am very helpful for this vedio

[@manpiero104]

Wow...you made the understanding very easy and simple❤👏👏

[@hahasong995]

thank you for explanation! but I still can not understand why it is said that household earned in the resource market ultimately is spent in the product market？ I think they may save some money, and invest to the firms instead of buying goods in the product market.

[@Shah66666]

awesome. keep it up sir!

[@desigamer1618]

Beautiful explanation.. I also want to know the product approach. Thanks a lot

[@shahfaisal9674]

Sir i am your new subscriber...👍

[@hashi95]

Excellent video

[@sandraximenez1254]

Awesome! thank you so much... every well explained!

[@AbdulQadir-gf5nv]

Countless thanks for magical explanation 👍🏼

[@fmomani]

profound and clear explanation of GDP. thank you!

[@engagekem2586]

thank u...that's the best video to understand Gdp mesurmt

[@boballs13]

I believe the best way to measure a nations economy is to factor it's GDP, it's export/imports and it's external debt. If I can come up with an equation representing this factors I am certain a better comprehension of an economy can be illustrated. But the GDP portion my need to be tweaked. In any case please tell me what you think.

[@vkrgfan]

In which category public corporate and sales taxes should be included?
Since transfer payments (welfare) isn’t part of GDP but financed through taxation, shouldn’t taxation be recorded as Government income?

[@lmao13366]

So simple. Thank you so much. What software did you use to give this explanation???

[@weberkom8630]

awesome !! I got it finally (thumb up)

[@juandavidmunoz2781]

Excellent video.. Thank you so much

[@AlomgirkabirPolash]

Thanks 😊 it's very helpful.

[@sreeniala4603]

Why are taxes collected by the government not accounted in the income approach method ?

[@awesusamuel9472]

Great job

[@wesley21878]

Thank you! This helped me out a ton!

[@begoodtoall3164]

Thank you and God bless you and your family real good in Jesus mighty name for this good work. Amen.

[@rozyhaokip6391]

Hi Jason please make videos on econometrics.. yo u really did a great job... cheers

[@berryonah]

thank you for this! I really learned a lot!

[@nguyenxuanlinh6741]

It is an amazing video for understanding the method of calculating GDP. It would be great if you could explain how a government calculate in reality? Where they collect the data? How to estimate the deviation of calculation?

[@Juan-wb3bz]

Is expenditure and income approach should the same output or must be veryical?

[@robertweinmann3520]

Awesome video. Really helped me. Thank you :)

[@latifsalman123]

Thank you sir, it was extremely useful.

[@priyankakushwaha3199]

why we add depreciation in GDP when we calculate by income approach?

[@superpantman]

Excellent upload

[@Randkn]

thank you so much , great explanation!!

[@parthshah3485]

Concepts clear. Thank you so much.

[@sipeolusoga5817]

How are direct taxes treated in GDP by income method

[@atin2819]

its very good learn

[@MYSTFD2]

Very helpful! Thank you so much.

[@thongsawathkeovichit5495]

Thanks for a great lesson

[@coleencadungog6754]

nice video

[@ibrahimelhaddad7272]

Very helpful ,thank you .

[@marvinvillapando6361]

tnx for the video..
sir do you know where to get those data for me to compute the gdp or estimate the future gdp of a certain country like the US or Eu? any online resources?

[@siongsiongtan8330]

Thank you. Crystal clear

[@zgjzffnjtfg]

very good explanation. did u study in St. Gallen?

[@alvinalvins1626]

great video...helped me alot

[@kwakhiwentshabakidx8307]

Thanks for that lecture!

[@CharlieTariliu]

Thank you. It was refreshing.

[@ashutoshtripathi3676]

very well explained

[@KhalilHomaam]

Thank you, it was really useful.

[@kawshikrahman6325]

thanks a lot

[@stantaylor2649]

How do one calculate GDP in a Cummunistic economy?

[@naya2276]

thanks so much sir

[@dechabomb1]

In summary in this video clip, income= expense. Is it correct? I am not sure. As I know, income - expense = profit or Loss. So the way to measure GDP by income appoarch and expenditure approach is not equal. That 's why 2 countries have the same number of GDP but one has national debt. Another has not.
And one more thing, government get money from
1. Tax ( normal way)
2. Borrow ( called bonds)
3. Just print money (called QE)

[@Bryan-xe3pj]

Thank you, well presented.

[@uncommonfavourmercy.k6830]

Thank you

[@janie8510]

thanks so much for this video

[@sangrambehuria9880]

thanks

[@lilylala3562]

Thanks man

[@madhusudankumar7225]

Thank you sir

[@PABTVGH]

Thanks Alot....

[@RavenAngel9753]

thank you so much for this :D it was really helpful

[@celinegastelum6480]

very helpful, thank you!

[@maiphung21]

Great video... thanks!

[@tzutzu6455]

You are my IB survival

[@MrSpoon-th3fq]

Hello, great vid. I would love, if you have time, a copy of your flow diagram, i cannot find anything like it.