UNIT 2: Budget, Trade, National Income, Disposable national income.

         Compensation of employers: this includes wages, salaries, fringe benefits, social security contributions, health and pension plans.

Disposable Personal Income

National Income – Personal Household Taxes + Government Transfer Payments.

Budget = Government Purchases of goods and services + Government transfer payments – Government Tax & Fee collection

+ = deficit

-  = surplus

Trade = Export – Import

+ = surplus

- = deficit

        There are two ways to calculating National Income.

National Income = compensation of employees + Rental Income + Interest Income + Corporate Profit + Proprietors Income

National Income = GDP – Indirect Business Taxes – Depreciation – Net Foreign Factor Payment

Net Domestic Product (NDP)

GDP – Depreciation (Consumption of Fixed Capital)

Net National Product (NNP)

GNP – Depreciation

GNP 

 GDP + Net Foreign Factor Payment