Calculating GDP unit 2 (◔̯◔)

January 29,2016

Expenditure approach

Add up all the spending on final goods and services produced in a given year

⭕️gdp= c + ig + g + xn

Income approach

Add up all of the income that resulted from selling all final goods and services produced in a given year
        •       Not too many people use it because they lie about their income

⭕️GDP= Wages+Rents+Interest+Profits+Statistical Adjustment


Compensation of employees- includes wages, salaries, fringe benefits,
social security contributions, and health/ pension plans

Rent- the income of the property owner

Interest- income from investments

Corporate profits- the income of the corporations stock holders

Proprietors income- income of entrepreneurs or partners

⭕️Budget- (gov purchases of goods and services + gov transfer payments - gov tax and fee collection)

        •       + = deficit
        •       - = surplus

⭕️Trade- (exports - imports)
        •       + = surplus
        •       - = deficit

National income:
1. ⭕️(Compensation of employees
+ Rental income
+ Interest income
+Corporate profits
+ Proprietors income)

2. ⭕️ Ni= (gdp -Indirect business taxes- depreciation- net foreign factor payment )

⭕️Disposable personal income:  ( national income - personal houses taxes + gov transfer payments)