Transcript GDP to PI - Humble ISD

GDP to PI
GDP=C + Ig + G + Xn
C is usually 67-70%
of GDP
Xn is usually a
negative number
C is the key to
growth
Going from GDP to PI numbers:
 GDP minus Consumption of Fixed
Capital (CFC or Depreciation) will
equal:
 NDP (Net Domestic Product)
 NDP minus Indirect Business
Taxes, minus “Net Foreign Factor
Income” (if this is a negative
number) will equal:
 NI (National Income)
 NI minus social Security
contributions (Payments), minus
Corporate Income Taxes, minus
“Undistributed Corporate Profits”,
plus transfer payments received
by citizens will equal:
 PI (Personal Income)
 PI minus Personal Taxes Paid
equals:
DI (Disposable Income)
DI minus Savings equals
C (Consumption)
Notes :
 Indirect Business Taxes:
 Sales Taxes
 Excise Taxes
 Licenses
 Net Foreign Factor Income:
 Money US citizens earn overseas and
send back to the US versus money
foreigners earn here and send back
to their home countries
(remittances)
 Undistributed corporate profits:
 Total corporate profits minus
corporate taxes paid and minus any
money paid to stockholders in the
form of dividend payments
 Transfer Payments:
 Social Security Payments,
Unemployment compensation
payments, welfare payments,
disability payments
 Where do credit card
expenditures and payments fit
in?????