Unit 2 - Expenditure/Income approach

January 28, 2015

Expenditure Approach:  C + Ig + G + Xn = GDP 

• Add up the market value of all the domestic expenditures made on final goods and services in a single year.

Income Approach: W + R + I + P + Statistical Adjustments

• Add up all the income earn by households and firms in  a single year.
• W - Wages
• R - Rents
• I - Interest
• P- Profits (Proprietor's income)

Formulas

Budget: Government Purchases of goods and services + Government Transfer Payments - Government tax and Fee collection. If the number is positive its Budget Deficit, If the number its negative its a Budget Surplus.

Trade: Exports - Imports

GNP: GDP + Net Foreign Factor Payment 

NNP: "Net National Product"  GNP - Depreciation

NDP: "Net Domestic Product"   GDP - Depreciation

National Income: "There is 2 formulas"   GDP - Indirect Business Taxes - Depreciation - Net Foreign Factor Payment           Compensation Of Employees + Proprietors Income + Rental Income + Interest Income + Corpus Profits

Disposable Personal Income: National Income - Personal Household Taxes + Government transfer payments