January 31, 2017

Calculating the GDP: Expenditures and Income Approach

Expenditure Approach: 

C + Ig + G + Xn (export-imports)

Income Approach: 

W- Wages (Compensation of Employees/Salaries)
+
R- Rent
+
I- Interest (Money you have to borrow/Money in bank earning interest)
+
P- Profits
+
Statistical Adjustment 

Budget Surplus/Deficit: 

Government Purchases of Goods and Services + Government Transfer Payments - Government Tax and Fee Collections 

+ = Deficit

- = Surplus 

Trade Surplus/Deficit:

Exports - Imports

+ = Surplus- = Deficit  

National Income: 

1. Compensation of Employees + Rental Income + Interest Income + Proprietors Income + Corporate Profits

2. GDP - Indirect Business Taxes - Depreciation - Net Foreign Factor Payment 

Disposable Personal Income:

National Income - Personal Household Taxes + Government Transfer Payments