Principles of Macroeconomics Day 2 NIPA National Income

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Principles of Macroeconomics Day 2: NIPA – National Income and Product Accounts Dr. Andrew

Principles of Macroeconomics Day 2: NIPA – National Income and Product Accounts Dr. Andrew L. H. Parkes “A Macroeconomic Understanding for use in Business” April 1, 2010 Principles of Macroeconomics, Day 3 卜安吉

NIPA Equations n NIPA – National Income and Product Accounts n GDP = C

NIPA Equations n NIPA – National Income and Product Accounts n GDP = C + I + G + NX n GNP = GDP – Plus: Income receipts from the rest of the world – Less: Income payments to the rest of the world April 1, 2010 Principles of Macroeconomics, Day 3 2

National Income n Wages and Salaries (we include Proprietor’s Income here) n Rental Income

National Income n Wages and Salaries (we include Proprietor’s Income here) n Rental Income n Interest n Profit n Business taxes are also a significant part of National Income. April 1, 2010 Principles of Macroeconomics, Day 3 3

GNP to National Income All from the BEA’s Data http: //www. bea. gov/ Gross

GNP to National Income All from the BEA’s Data http: //www. bea. gov/ Gross National Product - CCA: Capital Consumption Allowance (Depreciation) - Statistical discrepancy = National Income April 1, 2010 Principles of Macroeconomics, Day 3 4

Personal Income Finally, what are the components of Personal Income (first notice that we

Personal Income Finally, what are the components of Personal Income (first notice that we equate National Income with Personal Income, a small difference): Personal Income - Personal taxes (and Social Security Taxes) = Disposable Personal Income (DPI) = Consumption + Savings Note that consumption is called “personal outlays” in the NIPA documents!! April 1, 2010 Principles of Macroeconomics, Day 3 5