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.com/?page_id=5870

[@manojkumarpandey2992]

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

[@drgunit893]

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

[@veld66]

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

[@truerealpearl7781]

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

[@floopy312]

The best video about GDP measurement.

[@MrKelvinag]

Agreed, I feel confident going into exam today lol

[@engagekem2586]

word

[@lilyasser7785]

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

[@lukasbaral5108]

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

[@sooweichan3501]

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

[@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

[@darktheme2192]

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

[@elengrigoryan5446]

A brilliant explanation! Thank you!

[@MystiqWisdom]

This little picture can be said to sum up the whole world. Of course, you can magnify each part a million times to see how everything works in detail, but this is a beautiful little diagram that everyone should understand.

[@theasmrgamerunexposed2251]

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

[@chrisralte]

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

[@richbrainedutv]

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

[@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?

[@Moon1stJan]

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

[@user-ky4ny2ri3u]

finally understood GDP
WELL DONE AND THANKS

[@herifinamcasi]

thanks man, was really helpful for my midterm

[@atulnagargoje6337]

One of the best teacher on economics

[@bottomupengineering]

Great lecture series Jason.

[@WTFicey]

Very clear, precise and coherent. Thank you.

[@sandraximenez1254]

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

[@MN-ne7ee]

best explanation of gdp calculation. comprehensive yet simple

[@wesley21878]

Thank you! This helped me out a ton!

[@tl9150]

Thanks for the great walkthrough!

[@ukemeedem255]

Thanks, this is completely what I was looking for

[@fmomani]

profound and clear explanation of GDP. thank you!

[@harismir4461]

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

[@bhaskartarafdar1560]

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

[@Jramirez07062001]

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

[@tierneyeducation]

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

[@parthshah3485]

Concepts clear. Thank you so much.

[@Randkn]

thank you so much , great explanation!!

[@kwakhiwentshabakidx8307]

Thanks for that lecture!

[@sandiledayi4076]

Brilliant, very simplified and easy to understand

[@siongsiongtan8330]

Thank you. Crystal clear

[@thongsawathkeovichit5495]

Thanks for a great lesson

[@AlomgirkabirPolash]

Thanks 😊 it's very helpful.

[@AbdulQadir-gf5nv]

Countless thanks for magical explanation 👍🏼

[@CharlieTariliu]

Thank you. It was refreshing.

[@Bryan-xe3pj]

Thank you, well presented.

[@theperfectcelibate8669]

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

[@MYSTFD2]

Very helpful! Thank you so much.

[@rozyhaokip6391]

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

[@manpiero104]

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

[@delfinapacho1823]

Awesome, clear and understandable

[@lmao13366]

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

[@latifsalman123]

Thank you sir, it was extremely useful.

[@weberkom8630]

awesome !! I got it finally (thumb up)

[@juandavidmunoz2781]

Excellent video.. Thank you so much

[@naya2276]

thanks so much sir

[@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?

[@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.

[@JohnHaIo]

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

[@damithSL]

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

[@celinegastelum6480]

very helpful, thank you!

[@KhalilHomaam]

Thank you, it was really useful.

[@sangrambehuria9880]

thanks

[@robertweinmann3520]

Awesome video. Really helped me. Thank you :)

[@RavenAngel9753]

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

[@ibrahimelhaddad7272]

Very helpful ,thank you .

[@dianaforbes5414]

Thank you so much!

[@biplabsing56]

Thank you sir I am very helpful for this vedio

[@superpantman]

Excellent upload

[@desigamer1618]

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

[@janie8510]

thanks so much for this video

[@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.

[@maiphung21]

Great video... thanks!

[@uncommonfavourmercy.k6830]

Thank you

[@hashi95]

Excellent video

[@husnimoechtar]

knowledge always meant to be shared. Thanks :)

[@asnakew21tarekegn27]

It nice Presentation about GDP. thank you

[@nadimanwari7499]

Thank you sir

[@ashutoshtripathi3676]

very well explained

[@engagekem2586]

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

[@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?

[@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."

[@PABTVGH]

Thanks Alot....

[@kawshikrahman6325]

thanks a lot

[@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!

[@awesusamuel9472]

Great job

[@lilylala3562]

Thanks man

[@MrSpoon-th3fq]

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

[@atinsingharoy9282]

its very good learn

[@alvinalvins1626]

great video...helped me alot

[@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?

[@makxparkx]

Thank you nice explain =)

[@michaelsadek4449]

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

[@zgjzffnjtfg]

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

[@tzutzu6455]

You are my IB survival

[@sreeniala4603]

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

[@Juan-wb3bz]

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

[@TheLuckygonz]

your awesome!!!

[@coleencadungog6754]

nice video

[@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.

[@niks7783]

this is so cool

[@priyankakushwaha3199]

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