Lecture 7 National economy as a system

Lecture 7. National economy as a system

Lecture outline 1. Structure of national economy. 2. Main macroeconomic indicators. 3. Factors, which are increasing the competitiveness of the national economy.

Aim of the lecture • To understand the role of macroeconomic indicators in developing national economy system

Structure of national economy. • National economy is a complex of different spheres of the economy.

Structure of national economy 1. Material production sphere (industry, agriculture, construction, communication, trade and others) 2. Non –material production sphere: culture, education and science, health care, and others

• Main of national economy is to develop economy and to provide all members of society with convenient living standard, also to increase GNP person.

• To achieve the aim of national economy government carries out the following policies, such as: • Fiscal policy • Monetary policy

Main macroeconomic indicators. • There are several indicators that measure results of national economy. They are called macroeconomic indicators

Main macroeconomic indicators • • • GNP GDP National income Net national income National wealth

How to calculate GNP • GNP=ΣPx. Q P-price Q-quantity

The methods of measuring GNP • 1 - according to the expenses GNP=C+I+G+Xn C-consumption expenses() I- investment expenses G-government expenses Xn- net export (Export-import)

• 2. according to the income GNP=wage+interest+ +dividend+ profit+rent

What does GNP person show? GNP person= GNP: population e. g. 180 000 USD: 15 873= 11300

• “Competitiveness is defined as the ability to produce goods and services which meet the test of international markets, while at the same time maintaining high and sustainable levels of income or, more generally, the ability of (regions) to generate, while being exposed to external competition, relatively high income and employment levels’. ”