12421 Question 2: Fill in the blanks. (20 points) The three different approaches to measuring the GDP are the expenditure approach, the output approach, the Income approach and | Value-added . The expenditure approach aggregates the spending by the four sectors of the economy: (a) the household sector, (b) the sector, (c) the sector, and (d) the foreign sector, to yield the total GDP. The largest spending in Canada's aggregate GDP comes from the sector. When using the income approach, the first step is to calculate the total national income by adding employee compensation, proprietor's income, net interest, and rental income. There are six categories of economic exchanges that are omitted from GDP calculations. One such category is government transfer payments (like unemployment insurance payment), because it represents transfers of income without new production. Another category is because because they are unpaid and not part of market transactions. A third category IS because the transactions are unreported. Another category is because they are a transfer of ownership and do not represent current production. Another category is because only final goods are counted in the GDP. Another category is because it is difficult to estimate their market value. Instead of looking at just the nominal GDP value of a country, economists prefer to look at the GDP value over the years to get an idea of the growth in economic output. Real GDP is calculated by summing up the value of the year's output using year prices. While nominal GDP can rise as a result of a rise in output prices we know for sure that has risen when real GDP rises. The up and down movements of the real GDP that occur over time are known as the A GDP measure used to compare the economic well-being of the people in various countries is the per capita GDP, but this is not a reliable indicator of a country's economic welfare. One reason is that it is possible for a country with a relatively high GDP to have a relatively low per-capita GDP if it has a large e here to search 3 C CloudyInstead of looking at just the nominal GDP value of a country, economists prefer to look at the GDP value over the years get an idea of the growth in economic output. Real GDP is calculated by summing up the value of the year's output using year prices. While nominal GDP can rise as a result of a rise in | output or p prices . we know for sure that has risen who real GDP rises. The up and down movements of the real GDP that occur over time are known as the . A GDP measure us to compare the economic well-being of the people in various countries is the per capita GDP, but this is not a reliable indicator of a country' economic welfare. One reason is that it is possible for a country with a relatively high GDP to have a relatively low per-capita GDP if it has a large corporate profit population business cycle base real household business government output Non-market goods and services (babysitting, illicit drugs) Sales of used goods erground market activity 3'C Cloudy ere to search