Who Gets gdp?

The n_____ i_____ and p_____ a_____ (рахунки національного доходу та продукту) have four groups that use production. The table below shows that in the United States the largest amount goes to ordinary people and is classified as c_____ (споживання). The food, the clothes, the medical check up, and the gasoline you buy are all c _____ e_____ (споживчі витрати). The next largest use of output is by the government, including state and local governments in addition to the federal government. This category of g_____ s_____ (урядові витрати) includes items such as purchases of m_____ g_____ (товари військового призначення) , p_____ (виплати) to public school teachers, and the s_____ (платня) of your congressman. Not included as government expenditures are payments for which no service is expected, such as payment of s_____ s_____ to the e_____ (соціальна допомога громадянам похилого віку). This sort of transaction is classified as a transfer.

U.S. Gross Domestic Product, Selected Years (Numbers in billions of dollars)
.	1933	1960	1990
GDP	56.4	527.4	5803.2
Consumption	45.9	332.3	3831.5
Government Spending	8.7	113.8	1181.4
Investment	1.7	78.9	861.7
Net Exports	.1	2.4	-71.4
.
Sources: Survey of Current Business, August 2001;

The third category, investment, includes c_____ (споруджування) of new factories and the purchase of new machines by businesses. It also i_____ (включає) changes in inventories held by business and the purchase of new homes by consumers. New homes are considered i_____ s_____ (інвестиційні витрати) because they are long-lived assets that will yield services for many years. On the other hand, purchases of a_____ (електроприлади) and v_____ (засоби пересування) by consumers are considered consumption, though these items also have lifetimes much longer than a year.

The last group that receives the output that our economy produces is f_____ (іноземці). To take this group into account, we must add exports to consumption, investment, and government spending. However, some consumption, investment, and government spending is for goods that are produced in other countries, not here. One way to a_____ f_____ (прийняти до уваги) these purchases of foreign products would be to adjust consumption, etc. so that they included only the amounts spent on d_____ p_____ (вітчизняна продукція). However, this is not the way imports are taken into account. They are s_____ f_____ (вираховуватись з) exports to obtain n_____ e_____ (експорт мінус імпорт). A reason for this procedure is that data for imports as a whole is more r_____ (достовірний) than data broken into imported consumption expenditures, imported investment expenditures, and imported government expenditures.

We can summarize our discussion so far in terms of an e_____ (рівняння):

GDP = C + I + G + Xn

Exercise 9. Read and dramatize the following dialogue.

A.: As a future economist you ought to know certain things about gross national product.

B.: That's what I want. I hope to make my career in economics.

A.: What do you know about GNP?

B.: GNP is the total market value of all final goods and services produced in a given time period.

A.: It is something. But you should distinguish between nominal GNP and real GNP.

B.: What do you mean by that?

A.: Nominal GNP is the value of final output produced in a given period, measured in the prices of that period, whe­reas real GNP is the value of output measured in constant prices.

B.: Although prices serve as a convenient measure of market value, they can also distort our perceptions of real output.

A.: You are right. Imagine what would happen to our calculations of GNP if all prices were to double from one year to the next. Suppose, for example, that the price of oranges rose from 20 cents to 40 cents, the price of bicycles to 100 dollars and the price of airplanes to 2 million dollars each.

B.: How would such price changes affect this year's GNP?

A.: Obviously, the price increases would double the value of final output. Measured GNP would rise from 1.400 million dollars to 2.800 million dollars. Such a rise in GNP does not reflect an increase in the quantity of goods and services available to us. We are still producing the same quantities only the prices of those goods have changed.

B.: Now I understand, changes in GNP brought about by changes in the price level can give us a distorted view of economic reality.

A.: Surely we would not want to assert that our standard of living had improved just because price increases raised measured GNP from 1.400 million dollars to 2.800 million dollars.

B.: Thank you very much for your help. It's very useful in­formation.

A.: Not at all. See you later.

Exercise 10. Make up your own dialogue using the following expressions.

intermediate goods net investment

to determine production possibilities

gross investment to depend

standards of living to exceed

international trade exports

to be mirrored imports

Exercise 11. Communicative situations.

1. Can we increase consumption in a given year without cutting back on either investment or government services? Under what conditions?

2. If gross investment is not targe enough to replace the capital that depreciates in a particular year, is investment greater or less than zero? What happens to our production possibili­ties?

Exercise 12. Change the following sentences using the Future Perfect Tense (the Passive Voice).

EXAMPLE: Gross national product will be calculated next month.

Gross national product will have been calculated by the end of the month.

1. Prices on these goods will be set tomorrow.

2. Production of consumer goods of this company will be reduced next month.

3. The calculation of net national product will be done next week.

4. International trade will be rapidly developed in this country next year.

5. New technology will be sold to this company next year.

Exercise 13. Use the verbs in brackets in the Future Perfect Tense (the Passive Voice).

EXAMPLE: GNP per capita (to calculate) by the end of the week.

GNP per capita will have been calculated by the end of the week.

1. Intermediate goods (to purchase) by that time tomorrow.

2. Nominal GNP (to measure) by the end of the month.

3. These goods (to export) by the end of the month.

4. Purchases (to do) by tomorrow morning.

5. Production possibilities (to reduce) by that time.

Exercise 14. Translate into English.

1. Додану вартість цієї продукції буде обчислено до кінця тижня.

2. Нові інвестиції будуть вкладені в цей проект до кінця року.

3. Реальний валовий національний продукт буде обчислений економістами до кінця місяця.

4. Ці товари будуть доставлені посередниками до кінця тижня.

5. Угоду про купівлю обладнання відомої німецької фірми буде підписано українськими партнерами до кінця тижня.