Principles of Macroeconomics: Introduction II

The National Income Accounts

Production Side
Consumption
+ Investment
+ Government Purchases of Goods & Services
+ Net Exports
= Gross Domestic Product (GDP)
+ Income earned abroad by citizen
- Earnings of foreign residents & firms
= Gross National Product (GNP)
- Depreciation
= Net National Product
- Indirect Taxes & Other
= National Income

Income Side
Compensation of Employees
+ Corporate profits
+ Proprietors' Income
+ Rental income of persons
+ Net Interest
= National Income
- Corporate profits tax payments, undistributed profits, valuation adjustment
- Contribution to Social Security
+ Transfer payments
+ Personal interest income
= Personal Income
- Personal taxes
= Personal Disposable Income (PDI)
- Personal consumption expenditure
- Interest paid to business
- Net personal transfer payments to foreigners
= Personal saving