02/04/14 GDP Equations

• Expenditure Approach (goods and services)
• GDP= C+Ig+G+Xn
• Budget: Transfer payments+GPG's-GTFC
• Trade: Exports- Imports (+ surplus) (- deficit)
• Income Approach
• GDP= W+R+I+P (factors of production)
• W- Wages (Salaries/compensation of employees)
• R- Rents (Rental Income)
• I- Interests (Interest Income)
• P- Proprietor's Income
• Budget: Transfer payments+ Government purchases of goods and services- government tax and fee collection. (+ deficit) (- Surplus)
• National Income: Compensation of employees+ Proprietors Income+ Rental Income+ Interest Income+ Corporate Profits
• NI= GDP- Indirect business taxes- depreciation- net foreign factor payment
• Disposable Income: NI- Personal household taxes+ Government transfer payments
• Personal household taxes+ Personal Income taxes
• NDP (Net domestic product)= GDP- depreciation
• NNP (Net national product)= GDP-depreciation
• GNP (Gross National Product)= GDP= net foreign factor payment
• Depreciation ( consumption of fixed capital)