Y= C+I+G+(X-M) + Net Factor Income from Abroad Where, Y is the National Income C is the Private Consumption Expenditure I is the Investment Expenditure G is the Government Purchases of the goods and services X-M is the net Exports Precautions of Expenditure Method Expenditure on second hand goods should not included Expenditure on bonds and shares should not be included All government expenditure on transfer payments, such as Unemployment benefits, old age Pensions, scholarships etc. should not be included. Expenditure on all intermediate and services should not be included. Formula: National Income Accounting: GDPMP = C + I + G GNPMP = GDPMP + NFIA NDPMP = GDPMP D (or CCA) – NNPMP = GNPMP D – GDPFC = Domestic Factor Income + Consumption of Fixed Capital GDPFC = GDPMP IT + S – GNPFC = GNPMP IT + S – GNPFC = Domestic Factor Income + NFIA + Consumption of fixed capital. NDPFC = NDPMP IT + S – = NDPFC + NFIA NNPFC = Net Domestic Income + NFIA Personal Income = Private Income Corporate Taxes Corporate Savings – – Personal Disposable Income = Personal Income (Direct + Fines, Fees, etc. + Social – Security Contributions by Employees)
Y= C+I+G+(X-M) + Net Factor Income from Abroad Where, Y is the National Income C is the Private Consumption Expenditure I is the Investment Expenditure G is the Government Purchases of the goods and services X-M is the net Exports Precautions of Expenditure Method Expenditure on second hand goods should not included Expenditure on bonds and shares should not be included All government expenditure on transfer payments, such as Unemployment benefits, old age Pensions, scholarships etc. should not be included. Expenditure on all intermediate and services should not be included. Formula: National Income Accounting: GDPMP = C + I + G GNPMP = GDPMP + NFIA NDPMP = GDPMP – D (or CCA) NNPMP = GNPMP – D GDPFC = Domestic Factor Income + Consumption of Fixed Capital GDPFC = GDPMP – IT + S GNPFC = GNPMP – IT + S GNPFC = Domestic Factor Income + NFIA + Consumption of fixed capital. NDPFC = NDPMP – IT + S = NDPFC + NFIA NNPFC = Net Domestic Income + NFIA Personal Income = Private Income – Corporate Taxes – Corporate Savings Personal Disposable Income = Personal Income – (Direct + Fines, Fees, etc. + Social Security Contributions by Employees)
chapter_2_national_income.docx