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!

[@lilyasser7785]

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

[@veld66]

One of the best Economics videos available on CZcams, 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

[@sooweichan3501]

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

[@darktheme2192]

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

[@lukasbaral5108]

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

[@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

[@elengrigoryan5446]

A brilliant explanation! Thank you!

[@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 :)

[@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?

[@MN-ne7ee]

best explanation of gdp calculation. comprehensive yet simple

[@Moon1stJan]

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

[@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.

[@richbrainedutv]

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

[@bottomupengineering]

Great lecture series Jason.

[@sandraximenez1254]

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

[@WTFicey]

Very clear, precise and coherent. Thank you.

[@ukemeedem255]

Thanks, this is completely what I was looking for

[@user-ky4ny2ri3u]

finally understood GDP
WELL DONE AND THANKS

[@herifinamcasi]

thanks man, was really helpful for my midterm

[@tl9150]

Thanks for the great walkthrough!

[@tierneyeducation]

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

[@fmomani]

profound and clear explanation of GDP. thank you!

[@wesley21878]

Thank you! This helped me out a ton!

[@delfinapacho1823]

Awesome, clear and understandable

[@atulnagargoje6337]

One of the best teacher on economics

[@sandiledayi4076]

Brilliant, very simplified and easy to understand

[@harismir4461]

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

[@thongsawathkeovichit5495]

Thanks for a great lesson

[@parthshah3485]

Concepts clear. Thank you so much.

[@AlomgirkabirPolash]

Thanks 😊 it's very helpful.

[@Jramirez07062001]

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

[@Randkn]

thank you so much , great explanation!!

[@kwakhiwentshabakidx8307]

Thanks for that lecture!

[@Bryan-xe3pj]

Thank you, well presented.

[@siongsiongtan8330]

Thank you. Crystal clear

[@juandavidmunoz2781]

Excellent video.. Thank you so much

[@MYSTFD2]

Very helpful! Thank you so much.

[@AbdulQadir-gf5nv]

Countless thanks for magical explanation 👍🏼

[@CharlieTariliu]

Thank you. It was refreshing.

[@manpiero104]

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

[@latifsalman123]

Thank you sir, it was extremely useful.

[@theperfectcelibate8669]

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

[@biplabsing56]

Thank you sir I am very helpful for this vedio

[@asnakew21tarekegn27]

It nice Presentation about GDP. thank you

[@weberkom8630]

awesome !! I got it finally (thumb up)

[@berryonah]

thank you for this! I really learned a lot!

[@hashi95]

Excellent video

[@robertweinmann3520]

Awesome video. Really helped me. Thank you :)

[@bhaskartarafdar1560]

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

[@RavenAngel9753]

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

[@celinegastelum6480]

very helpful, thank you!

[@superpantman]

Excellent upload

[@naya2276]

thanks so much sir

[@ibrahimelhaddad7272]

Very helpful ,thank you .

[@KhalilHomaam]

Thank you, it was really useful.

[@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?

[@Shah66666]

awesome. keep it up sir!

[@JohnHaIo]

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

[@maiphung21]

Great video... thanks!

[@engagekem2586]

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

[@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 CZcams video.

[@awesusamuel9472]

Great job

[@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.

[@sangrambehuria9880]

thanks

[@rozyhaokip6391]

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

[@husnimoechtar]

knowledge always meant to be shared. Thanks :)

[@ashutoshtripathi3676]

very well explained

[@dianaforbes5414]

Thank you so much!

[@janie8510]

thanks so much for this video

[@atinsingharoy9282]

its very good learn

[@nadimanwari7499]

Thank you sir

[@kawshikrahman6325]

thanks a lot

[@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?

[@damithSL]

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

[@lmao13366]

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

[@uncommonfavourmercy.k6830]

Thank you

[@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?

[@PABTVGH]

Thanks Alot....

[@alvinalvins1626]

great video...helped me alot

[@desigamer1618]

Beautiful explanation.. I also want to know the product approach. 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.

[@MrSpoon-th3fq]

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

[@coleencadungog6754]

nice video

[@lilylala3562]

Thanks man

[@priyankakushwaha3199]

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

[@shahfaisal9674]

Sir i am your new subscriber...👍

[@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."

[@makxparkx]

Thank you nice explain =)

[@sreeniala4603]

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

[@michaelsadek4449]

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

[@TheLuckygonz]

your awesome!!!

[@williamp9117]

Can this method be done at a city/district level

[@niks7783]

this is so cool

[@EightToneSpanish]

Could some one help me get this straight in my head. At the end of the video he states all money spent on imports will always come back as reciprocal money spent on exports.
Is this really true.
I thought if imports are bought the foreign country receives foreign exchange which would be changed into their domestic currency but not come back to as goods.
I've always thought of imports as a "permanent" leak of domestic expenditure.

[@tzutzu6455]

You are my IB survival