Income and expenditure views of GDP | GDP: Measuring national income | Macroeconomics | Khan Academy

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[@rujalkawan7031]

This made it easy to understand ❤

[@titusfantevi8965]

Please, how do we treat taxes on production and imports when finding GDP

[@elitzortiz163]

Holy crap you saved me

[@bluesuperman1]

Supposedly both measures are equal. This confuses me because the government is not accounted for on the income side, just households. What about government income in the form of taxes?

[@taotang9302]

That is "Indirect taxes" which adds to the income side.

[@PasinduPereralink]

But what about people renting houses to other people just to live in, not to produce. That expenditure and Income is not GDP(because it's not a new product) , right?

[@Crowellnoob]

+Pasindu Perera It is. What about taking care of own children by two different mothers vs hiring each other to do the same? Only second will be measured by GDP.

[@03bala]

What is alternative way to measure real gdp and why is it better than real gdp

[@guitarzilla]

Deficit spending is our economic model. That and bond selling via wage arbitrage. Oh, and zero interest rates to keep it afloat. For a little longer.

[@emilian-gabrielchirita4960]

This aged well

[@zebaali2529]

how is income = exp? as savings are done by hh and firms

[@DistributistHound]

Great question, truth is they aren't equal, incomes are included in expenses in the way of salaries, profits, rents etc. However the other opex and also capex are included which make prices > incomes, that creates a lack of purchasing power, currently is fixed by producing more stuff, lowering prices even at a lost, exporting or borrowing money. I'm happy to point you in the right direction if you want to learn more about it

[@venjerw6879]

Do firms pay all the revenue to households?

[@CoenRox36]

Yes in some form or another as it is assumed that households own all the factors of production. With the profits firms make they will pay expenses which include, wages, land rent, capital rent (in the form of dividends for investors) creating a circular flow of income. It is a majorly simplified model but in the end all profits are distributed to households and vice versa in a 2 sector economy.

[@taotang9302]

The firms can retain profit

[@nsq2487]

@@taotang9302 yes but the firms are owned by people so in a way everything goes to households

[@thegladiator4489]

Firms or Farms?

[@nimrahere6029]

Firms

[@kelvinndereba5423]

Firms man

[@saoir]

Poor ...

[@compulsi0n]

??

[@romanfox5368]

I know! I mean, da phuq? Dat didn't make no sense!

[@raptors12349]

lol