1. Is It Counted In GDP? Check your Homework! C Y 6 N 6 N 3 N 6 N 1 N C Y
___ ___ 1. You buy a purple “Tinky Winky”, [produced in TX] from Wal-Mart.
___ ___ 2. You and your family paint your house. [labor involved]
___ ___ 3. You marry your housemaid. [“working-for-love”] [her services]
___ ___ 4. You buy 100 shares of Microsoft Corporation.
___ ___ 5. You volunteer to babysit your little sister to help your parents while they work.
___ ___ 6. Bob buys a 1965 ford Mustang convertible, in 2010, which is in mint condition.
___ ___ 7. The salesman gets a commission [pay] for selling that 1965 Ford Mustang in 2010.
___ ___ 8. You and your friend volunteer to cook at the senior class picnic.
___ ___ 9. Dr. Payne does $1,000 worth of dental work but reports only $500 of it.
Does the $500 the dentist keeps and doesn’t report count?
___ ___ 10. You are given suitcase full of $100 bills from the sale of smuggled drugs.
___ ___ 11. Your mother is teaching you to read [& not having much success].
___ ___ 12. Your dad bakes you a home-baked loaf of bread. [his labor]
___ ___ 13. You buy a loaf of bread from Kroger’s Grocery Store.
___ ___ 14. The U.S. government purchases 5 B-2 Bombers for $2 B each.
___ ___ 15. Ford buys a ton of sheet metal used in making car doors.
___ ___ 16. You buy a new “iPad 2” [produced in China] from the Apple store.
___ ___ 17. You send in a $90 check to your dentist for cleaning your teeth.
___ ___ 18. Your family buys a new house next to the mansion of Bill Gates.
___ ___ additional teachers are hired by the Frisco ISD.
___ ___ 20. GM invest in $500 million worth of robots to assemble their cars.
___ ___ 21. You volunteer 10 hours a week of your time to work for senior citizens.
___ ___ 22. Ford produces 25,000 F150s in Denver which are not sold by the end of the year.
___ ___ 23. Russia buys 3,000 Dell computers, produced in NY, as they become Rusky Dell Dudes.
___ ___ 24. A man’s wife does all his cooking and sewing, working for him 16 hours per day.
___ ___ 25. Nike produces $10 million worth of Nike Air Jordan’s in Vietnam. C Y 6 N 6 N 3 N 6 N 1 N C Y 6 N 8 N 7 N 6 N 6 N
1. 2nd Hd sales
2. Transfers
3. Financial
4. Intermediate
5. Overseas
6. Non-market
7. Illegal
8. Unreported C Y G Y 4 N 5 N C Y Ig Y G Y Ig Y 6 N Ig Y X Y 6 N 5 N

2. National Income Accounting [NIA]
Gross Domestic Product [GDP]
& Its Four Cousins
[NDP, NI, PI, & DI]

3. Know How To Figure GDP & NDP.

4. National Income Accounting
GDP= C +I+G+Xn (The Gross Domestic Product) = Consumption+Investment+Government Spending+ Net Exports (all exports-all imports)
NDP= GDP- Depreciation (Net Domestic Product)
NI= NDP +NFFIEUS-Statistical Discrepancy (National Income) Net Foreign Factor Income earned in US
PI= NI- Undis Corp Pro–Corp Inc Taxes -Soc Secur-Taxes on pro. & M+TP= (Undistributed Corporate Profits-Corporate Income Taxes- Social Security- Taxes on Production and Imports- Transfer Payments) (Personal Income)
DI= PI- personal income taxes) (Disposable Income)

5. expenditure approach]
18th Ed. NIA – 2009 [$14,256]
“U Can See Those Thunderducks”
$10, 089
[“C”]
Consumption
[66%]
-Depreciation
[Replacement Cap.]
$1,864
-$418 Undis Cor Pro
-$315 Corp Inc Tax
-$967Soc Sec Con
-1090 Taxes on pro.& M
+N.F.F.I.
$105
Y earned/not received
-Statistical Discrep.
$209
[to make the income
approach match the
expenditure approach]
+$2,528 Trans Pay
Y received/not earned
$12,392
[births-deaths]
“Available
for sale”
$12,026
PI is what we
can spend, save,
or pay in taxes.
“Income
received by
households,
whether
earned or
unearned”
Personnel
Taxes
-$1,102
Gross Private
Domestic
Investment
$1, 628
$12,288
“Income earned
by U.S. resources”
plus taxes on pro-
duction & imports
$10,924 DI
is what we can
SPEND or
SAVE.
ROW[$264]
U.S. [$159]
NFFI = $105
Government
Purchases
$2,931
Xn(X-M)
-$392
GDP
Gross Domestic Product
$14,256
NDP
National Domestic Product
$12,392 NI
National Income
$12,288 PI
Personal income
$12,026 DI
Disposable Income
$10,924

6. Depreciation, Investment & Disinvestment
Negative Net Investment
Depreciation exceeds Ig
Positive Net Investment
Ig exceeds Depreciation In
Investment
of $531 bil. Ig
$2,105 Trillion
Depreciation
1933
$7.6 billion
[in current dollars]
Disinvestment
of $6 billion
Great Depression
[1933]
Declining productive capacity
Expanding productive capacity
Depreciation
2005
$1,574 Trillion Ig
$1.6 billion
Ig($1.6) - D($7.6) = (Disinv. of $6)
(Disinvest. of $6) + D($7.6)=($1.6)
Ig($1.6)–Disinv.($6)=(Depr. of $7.6)
Ig($2,105) - D($1,574) = (In of $531)
In($531) + D($1,574) = (Ig of $2,105)
Ig($2,105)-In($531)=(Depr. of $1,574)

7. A Century of GDP Changes
Manufacturing 22%
Government 10%
THE MIX OF OUTPUT IN 1900
Construction and Mining 9%
Farming 37%
Services 22%
Services 54%
Government 18%
Manufacturing 20%
Construction and Mining 6%
THE MIX OF OUTPUT IN 2000
Farming 2%

8. If U.S. profits in the ROW [$220] are greater than
N.F.F.I.
[U.S.A. Profits Overseas]
Rest of World
$220 billion
Foreign Profits in U.S.A.
$210 billion
N.F.F.I. = $10 billion
If U.S. profits in the ROW [$220] are greater than
foreign profits in the U.S. [$210], add the difference.

9. If foreign profits in the U.S. [$212] are greater than
N.F.F.I.E.U.S.
[U.S.A. Profits Overseas]
Rest of World
$200 billion
Foreign Profits in U.S.A.
$212 billion
N.F.F.I.E.U.S. = -$12 billion
If foreign profits in the U.S. [$212] are greater than
U.S. profits in the ROW [$200], subtract the difference.

10. Simon Kuznets and Sir Richard Stone
Father of GDP - gave “quantitative precision to economic entities”
Sir Richard Stone
After WWII, Stone headed a U.N. project that developed a standard
NIA model for other countries. Today, most countries follow these
guidelines, making international comparisons possible.

11. [GDP and its four cousins]
[18th Ed] National Income Accounting
C Ig G + Xn[X-M] =
GDP–Depreciation= [what is for sale]
NDP +NFFIEUS–Statistical Discrepancy =
NI– Undis Corp Pro–Corp Inc Taxes -Soc Secur-Taxes on pro. & M+TP=
[PI is what you can spend, save, or pay in taxes]
PI – Personal Income Taxes =
[DI is what you can spend or save ]
[GDP and its four cousins]
[“Replacement capital”] -

12. Elaborate Circular Flow Showing NIAD P PI DI
NDP NI

13. $112 ROW $100 NFFI = -$12 -307 -12 -10 -46 -88 -534 -169 -231 +283
[18th Edition] NIA Practice – “How To Do It”
Personal taxes Undistributed corp. profits
Imports Social Security contrib
+Transfer payments Personal consumption ,316
-Corporate Income Taxes Gross private domes invest
-Taxes on prod. & imports Government purchases
Exports Depreciation [Capital consumption] 307
Statistical Discrepancy N.F.F.I.E. in the U.S
C = $_______
Ig = $_______
G = $_______
Xn = $_______
Gross Domestic Product (GDP)
-Consumption of fixed capital
Net Domestic Product (NDP)
+Net For. Factor Inc. Earn. U.S.
-Statistical Discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on prod. & imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
I’m going through an academic recession.
2,316
$_____
______
$______
503
English C
Accounting C
American History D
Economics F
673
+103
ROW
$100
3,595
-307
3,288
-12
-10
$112
3,266
-46
-88
-534
-169
NFFI = -$12
-231
+283
3,015
-403
2,612

14. $112 ROW $100 NFFI = -$12 -Consumption of fixed capital
[18th Edition] NIA Practice – “How To Do It”
Personal taxes Undistributed corp. profits
Imports Social Security contrib
+Transfer payments Personal consumption ,316
-Corporate Income Taxes Gross private domes invest
-Taxes on prod. & imports Government purchases
Exports Depreciation [Capital consumption] 307
Statistical Discrepancy N.F.F.I.E. in the U.S
C = $_______
Ig = $_______
G = $_______
Xn = $_______
Gross Domestic Product (GDP)
-Consumption of fixed capital
Net Domestic Product (NDP)
+Net For. Factor Inc. Earn. U.S.
-Statistical Discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on prod. & imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
$______
______
$_____
ROW
$100
$112
NFFI = -$12

15. National Income Accounting

16. $100 NIA #1 ROW $110 NFFI = $10 -Consumption of fixed capital
[18th Edition]
Personal taxes Undistributed corp. profits 65
Statistical Discrepancy Social Security contrib
+Transfer payments Personal consumption ,820
-Corporate Income Taxes Gross private domes invest
-Taxes on prod. & imports 265 Government purchases
Exports Depreciation [capital consumption]
Imports N.F.F.I.E. in the U.S
NIA #1
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Consumption of fixed capital
Net Domestic Product (NDP)
+Net For. Factor Inc. Earn. U.S.
-Statistical Discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on prod. & imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
1,820
447
587
+29
$2,883
-317
$2,566
+10
-12
$2,564
-65
-98
-158
-265
+330
$2,308
-370
$1,938
ROW
$110
$100
NFFI = $10

17. $100 NIA #1 ROW $110 NFFI = ____ -Consumption of fixed capital
[18th Edition]
Personal taxes Undistributed corp. profits 65
Statistical Discrepancy Social Security contrib
+Transfer payments Personal consumption ,820
-Corporate Income Taxes Gross private domes invest
-Taxes on prod. & imports 265 Government purchases
Exports Depreciation [capital consumption]
Imports N.F.F.I.E. in the U.S
NIA #1
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Consumption of fixed capital
Net Domestic Product (NDP)
+Net For. Factor Inc. Earn. U.S.
-Statistical Discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on prod. & imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
_________
________
_______
ROW
$110
$100
NFFI = ____

18. $118 NIA #2 ROW $100 NFFI = -$18 _545 -Consumption of fixed capital
[18th Edition]
Exports Undistributed corp. profits 37
Imports Social Security contrib. 25
+Transfer payments Personal consumption
-Corporate Income Taxes Gross private domes invest
-Taxes on prod. & imports Government purchases
Personal taxes N.F.F.I.E
Statistical Discrepancy Depreciation
NIA #2
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Consumption of fixed capital
Net Domestic Product (NDP)
+Net For. Factor Inc. Earn. U.S.
-Statistical Discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on prod. & imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
_310
__85
130
___20
_545
___25
___520
__-18
__15
$487
-37
-55
-25
-15
+39
$394
-60
$334
ROW
$100
$118
NFFI = -$18

19. $118 NIA #2 ROW $100 NFFI = -$18 _____ -Consumption of fixed capital
[18th Edition]
Exports Undistributed corp. profits 37
Imports Social Security contrib. 25
+Transfer payments Personal consumption
-Corporate Income Taxes Gross private domes invest
-Taxes on prod. & imports Government purchases
Personal taxes N.F.F.I.E
Statistical Discrepancy Depreciation
NIA #2
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Consumption of fixed capital
Net Domestic Product (NDP)
+Net For. Factor Inc. Earn. U.S.
-Statistical Discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on prod. & imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
______
_____
_______
ROW
$100
$118
NFFI = -$18

20. $123 NIA #3 ROW NFFI = -$23 $100 -Consumption of fixed capital
[18th Edition]
Personal taxes Undistributed corp. profits
Exports Social Security contrib
Imports Personal consumption
+Transfer payments Gross private domes invest
-Corporate income taxes 38 Government purchases
-Taxes on prod. & imports 21 Depreciation [capital consumption] 45
Statistical Discrepancy N.F.F.I.E. in the U.S
NIA #3
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Consumption of fixed capital
Net Domestic Product (NDP)
+Net For. Factor Inc. Earn. U.S.
-Statistical Discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on prod. and imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
358
130
165
+20
$673
-45
$628
-23 -8
$597
-38
-40
-21
+41
$516
-50
$466
ROW
$100
$123
NFFI = -$23

21. $130 NIA #4 ROW $100 NFFI = -$30 A “streaker”
[18th Edition]
Personal taxes Undistributed corp. profits 16
Exports Social Security contrib
Imports Personal consumption
+Transfer payments Gross Investment
-Corporate income taxes Government purchases
-Taxes on prod. & imports N.F.F.I.E. in the U.S
Depreciation [cap. Consumption] 24 Statistical Discrepancy
NIA #4
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Consumption of fixed capital
Net Domestic Product (NDP)
+Net For. Factor Inc. Earn. U.S.
-Statistical Discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on prod. and imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
312
104
110
+14
$540
-24
$516
-30
-14
$472
-16
-42
-32
-34
+50
$398
-60
$338
A “streaker”
ROW
$100
$130
NFFI = -$30

22. = GDI GDP [$14,256] [$14,256] CIRCULAR FLOW MODEL $ COSTS $ INCOMES
RESOURCE
MARKET
RESOURCES
INPUTS =
BUSINESSES
HOUSEHOLDS
GOODS &
SERVICES
GOODS &
SERVICES
GDP
[$14,256]
PRODUCT
MARKET
$ REVENUE
$ CONSUMPTION

23. GDP Expenditure approach [C+Ig+G+Xn]
GDP can be measured either by total spending on U.S. production or by total income received from that production.
Expenditure approach [C+Ig+G+Xn]
Adds up the aggregate expenditure on all final goods and services produced during that year Gross Domestic Production
Income approach [R+I+P+SA+W (RIP SAW)]
Adds up the aggregate income earned during the year by those who produce that output Gross Domestic Income[sales]

24. + + + + + + + G D P = = Two Approaches to GDP Expenditure Approach
Gross Domestic Production
Income Approach
Gross Domestic Sales
Consumption by
Households
Rents + +
Interest +
Investment by
Businesses G D P +
Profits + = =
Government
Purchases
Statistical Adjustments
[corporate income taxes,
Dividends, undistributed
Corporate profits] + +
Expenditures
By Foreigners
Wages

25. THE INCOME APPROACH [RIP SAW]
Compensation of Employees
Rents
Interest
Profits [Proprietors’ Income]
SA [statistical adjustments]
Corporate Income Taxes
Dividends
Undistributed Corporate Profits
Wages

26. Expenditure and Income Approach to GDP [2009]
Receipts: Expenditures Approach
C $10,089
Ig 1,628
G 2,931 Xn
GDP $14,256
Expenditure and Income Approach to GDP [2009]
Allocations: Income Approach____
Compensation of employees $7,792
Rents
Interest
Proprietor’s income ,040
Corporate Profits ,309
Taxes on production & imports 1,090
National Income $12,288
Net Foreign Factor Inc
Statistical Discrepancy
Consumption of fixed capital 1,864
GDP $14,256

27. 3. [8 pts] Indicate whether each of the following is counted in
the U.S. GDP for the year Explain each of your answers.
(a) The value of used textbook sold through online auction in 2006.
FRQ 2007
Answer: No, it was counted the year it was produced. Because it was
not produced again, it would not be counted. That would be double counting.
[2 pts: 1 pt for saying not included and 1 pt for saying not produced in 2006]
b. Rent paid in 2006 by residents in an apartment building built in 2000
Answer: Yes, rents consist of the income received by the households and
businesses that supply property resources. The properties have to be maintained
or “serviced” each year. You are consuming a service It is included in the income
approach to GDP.
[2 pts: 1 pt for “yes” and 1 pt for saying this is the payment for services]
c. Commissions earned in 2006 by a stockbroker
Answer: Yes, payment is being made for productive services of the
broker. So the purchase of stocks would not count but his work would.
[2 pts: 1 pt for “yes” and 1 pt for saying this is the payment for services]
d. The value of autos produced in 2006 entirely in South Korea by a
firm fully owned by U.S. citizens
Answer: No, GDP measures production inside the U.S. regardless of
ownership. These autos were produced in South Korea.
[2 pts: 1 pt for “not included” and 1 pt for saying produced in Korea]

28. Nominal GDP Real GDP and What is the difference between
[prices of output in the current year]
[measures “output and prices”]
and
Real GDP
[base year prices of the year being measured]
[measures “only output”]

29. Importance of Real GDP in Determining a Recession
Real GDP measures current output at base-year prices.
Apple GDP Example
A country produces 10 apples in base year x $1;
Nominal [current] & Real [constant] GDP both=$10
Year 2: A country produces 10 apples x $1.25;
Nominal GDP=$12.50 (no recession but worse off)
[Real GDP would = $10 (10 apples x $1)]
Or Year 2: A country produces 9 apples x $1.25;
Nominal GDP=$11.25 but real is $9 (9 apples x $1)
(recession although nominal GDP is up)

30. Nominal [money] GDP v. Real GDP
An increase in prices and/or output will increase
nominal GDP.
Only an increase in output will increase real GDP.
Nominal GDP could increase even if output falls.
Real GDP = Nominal Y/GDP deflator x 100
So, nominal GDP measures output & prices.
Real measures only output [actual production]
Constant (real) GDP v. current (money) GDP

31. Nominal [ ] GDP v. Real GDP
Base year[$50/$50=1x100=100]
$46/$50x100=92 [deflation of 8%]
Price of Market Basket(2001) [nominal GDP] $64
GDP Price Index = Price of same Market Basket(1998)x100; [Real GDP] $50x100=128
[GDP Deflator] in the base year (1998) [$64/128 x 100 = $50]
Nominal [Current) GDP v.
Real (constant) GDP

32. “GDP” Balloon [Real GDP=Nominal GDP/GDP Deflator X 100]
[$13,847]
Inflation
component
GDP Deflator [119.98]
Real GDP
$11,541
Real GDP
[& Nominal GDP]
$9,847
Base Year
+ $1,694 trillion
2000
[not $4 trillion]
2006
Nominal GDP – measured in terms of money.
[Current output measured in current prices]
Real GDP – measured in terms of goods/services.
[Current output measured in base-year prices]
Real GDP takes the “air” out of the nominal GDP “balloon”.
The effects of inflation have been eliminated, so the
remaining changes are “real” changes.

33. [Real GDP must decline for 6 months]
No Recession
[Real GDP must decline for 6 months]

34. Recession [Real, not nominal GDP has declined]
Inflation
component
Real GDP

35. Long-term average growth (3%)
The Business Cycle in U.S. History [12 Recessions since WWII, from 6 months to 16 months]
Recessions 20
Annual growth 15 10 5 3
GROWTH RATE (percent per year) -5
Zero growth
Long-term average growth (3%)
-10
1930
1940
1950
1960
1970
1980
1990
2000
2007

36. Positive Net Investment [Ig>D] [increasing product. capac.]
Gross Investment -
Depreciation =
Net Investment
Net
Investment
Gross
Investment
Depreciation
Increased
[increasing product. capac.]
Consumption
and
Government
Spending
Stock of
Capital
Stock of
Capital
January 1
Year’s GDP
December 31

37. Depreciation, Investment & Disinvestment
Negative Net Investment
Depreciation exceeds Ig
Positive Net Investment
Ig exceeds Depreciation In
Investment
of $531 bil. Ig
$2,105 Trillion
Depreciation
1933
$7.6 billion
[in current dollars]
Disinvestment
of $6 billion
Great Depression
[1933]
Declining productive capacity
Expanding productive capacity
Depreciation
2005
$1,574 Trillion Ig
$1.6 billion
Ig($1.6) - D($7.6) = (Disinv. of $6)
(Disinvest. of $6) + D($7.6)=($1.6)
Ig($1.6)–Disinv.($6)=(Depr. of $7.6)
Ig($2,105) - D($1,574) = (In of $531)
In($531) + D($1,574) = (Ig of $2,105)
Ig($2,105)-In($531)=(Depr. of $1,574)

38. Expanding/Static/Declining Productive Capacity
increased
Expanding Productive Capacity
Maintaining
our production
possibilities
No change
Static Productive Capacity
decreased
Declining Productive Capacity

39. SHORTCOMINGS OF GDP Non-market Transactions don’t count
Earthquakes, divorces, etc. increase GDP
Leisure isn’t factored in
Improved Product Quality
The Underground Economy
GDP’s impact on the Environment
Per Capita Output
Countries with low GDP per capita have more infants with low birth weight, higher rates of infant mortality, higher rates of maternal mortality, higher rates of child malnutrition, and less common access to safe drinking water. Also, fewer go to school and they have fewer teachers. They have fewer TVs and telephones, fewer paved roads. They also win fewer Olympic medals.

40. NIA NS 1-10 produced (by/within) a nation in one year.
1. GDP is the monetary value of all final domestic goods/services
produced (by/within) a nation in one year.
2. If N.F.F.I. is positive, which means U.S. profits are greater in the
ROW than foreign profits in the U.S., then (GDP/GNP) is larger.
3. Double or multiple counting can be avoided by counting only
(intermediate/final) goods.
4. (Final/Intermediate) goods and services refer to products
purchased by the ultimate users.
5. Transfer payments [when you take tax money from those who
are working & give it to those who are not working] (do/do not)
count in GDP because they (do/do not) reflect current production.
6. (The purchase of 100 shares of Playboy stock/
The purchase of a drill press) is not considered real investment.
7. If depreciation exceeds gross private domestic investment,
it can be concluded that In is (positive/negative) & we have
declining productive capacity.
8. Depreciation can be determined by (adding/subtracting) In from Ig.
9. The largest component of GDP (spending) is (C/Ig/G/Xn)
and the smallest is (C/Ig/G/Xn).
10. NDP is (GDP-indirect business taxes/GDP-Depreciation).
NIA NS 1-10

41. GDP NS 11 and 14
11. Real GDP and nominal GDP differ because real GDP has
been adjusted for changes in (depreciation/inflation).
14. Which economy has expanding productive capacity (positive Ig)?
(A/B/C). Which has declining productive capacity [negative Ig?
(A/B/C). Which has static productive capacity? (A/B/C).

42. ROW $120 $100 PracticeNIA- Can you do it? NFFI = $__
Exports Undistributed corp. profits
Imports Social Security contrib
+Transfer payments Personal consumption
-Corporate Income Taxes Gross private domes invest
-Taxes on prod. & imports Government purchases
Personal Taxes Depreciation [capital consumption]
Statistical discrepancy N.F.F.I
PracticeNIA- Can you do it?
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
Capital Consumption
Net Domestic Product (NDP)
Net Foreign Factor Inc. Earned in the U.S.
Statistical discrepancy
National Income (NI)
Undistributed Corporate Profits
Corporate income taxes
Social Security Contributions
Taxes on production and imports
Transfer payments
Personal Income (PI)
Personal Taxes
Disposable Income (DI)
_______ $
______
ROW
$120
$100
NFFI = $__

43. ROW $120 $100 NIA #5 NFFI = $20 -Capital Consumption
[18th Edition]
Exports Undistributed corp. profits
Imports Social Security contrib
+Transfer payments Personal consumption
-Corporate Income Taxes Gross private domes invest
-Taxes on prod. & imports Government purchases
Personal Taxes Depreciation [capital consumption]
Statistical discrepancy N.F.F.I
NIA #5
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Capital Consumption
Net Domestic Product (NDP)
+Net Foreign Factor Inc. Earned in the U.S.
-Statistical discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on production and imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
260 75
100 +2
$437
-15
$422
+20
-30
$412
-35
-40
-25
+42
$324
-50
$274
ROW
$120
$100
NFFI = $20

44. Clear your Desks!
QUIZ TIME!!!

45. ROW $115 $100 NIA #6 NFFI = $15 -Capital Consumption
[18th Edition]
Exports Undistributed corp. profits
Imports Social Security contrib
+Transfer payments Personal consumption
-Corporate Income Taxes Gross private domes invest
-Taxes on prod. & imports Government purchases
Personal taxes Depreciation [capital consumption]
Statistical discrepancy N.F.F.I
NIA #6
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Capital Consumption
Net Domestic Product (NDP)
+Net Foreign Factor Inc. Earned in the U.S.
-Statistical discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on production and imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
340
116
170
-20
$606
-25
$581
+15
-24
$572
-16
-28
-32
+36
$508
-58
$450
ROW
$115
$100
NFFI = $15

46. ROW $115 $100 Quiz#1 NFFI = $___ Capital Consumption
Name__________________________
Exports Undistributed corp. profits
Imports Social Security contrib
+Transfer payments Personal consumption
-Corporate Income Taxes Gross private domes invest
-Taxes on prod. & imports Government purchases
Personal taxes Depreciation [capital consumption]
Statistical discrepancy N.F.F.I
Quiz#1
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
Capital Consumption
Net Domestic Product (NDP)
Net Foreign Factor Inc. Earned in the U.S.
Statistical discrepancy
National Income (NI)
Undistributed Corporate Profits
Corporate income taxes
Social Security Contributions
Taxes on production and imports
Transfer payments
Personal Income (PI)
Personal Taxes
Disposable Income (DI)
______ $
_____
ROW
$115
$100
NFFI = $___

47. ROW $244 $210 NIA for 2005 NFFI = 34 -Capital Consumption
[17th Edition]
Personal taxes ,210 -Undistributed corp. profits
Exports ,101 -Social Security contrib
Imports ,828 Personal consumption ,746
+Transfer payments 1,970 Gross private domes invest ,105
-Corporate income taxes Government purchases ,363
-Taxes on prod. & imports Depreciation [capital consumption] 1,574
Statistical Discrepancy N.F.F.I
NIA for 2005
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Capital Consumption
Net Domestic Product (NDP)
+Net Foreign Factor Inc. Earned in the U.S.
-Statistical discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on production & imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
8,746
2,105
2,363
-727
$12,487
-1,574
$10,913 34
-43
$10,904
-460
-378
-871
-917
+1,970
$10,248
-1,210
$9,038
ROW
$244
$210
NFFI = 34

48. ROW $244 $210 Quiz#2 NFFI = $__ Capital Consumption
Name_______________________
Personal taxes ,210 -Undistributed corp. profits
Exports ,101 -Social Security contrib
Imports ,828 Personal consumption ,746
+Transfer payments 1,970 Gross private domes invest ,105
-Corporate income taxes Government purchases ,363
-Taxes on prod. & imports Depreciation [capital consumption] 1,574
Statistical Discrepancy N.F.F.I
Quiz#2
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
Capital Consumption
Net Domestic Product (NDP)
Net Foreign Factor Inc. Earned in the U.S.
Statistical discrepancy
National Income (NI)
Undistributed Corporate Profits
Corporate income taxes
Social Security Contributions
Taxes on production & imports
Transfer payments
Personal Income (PI)
Personal Taxes
Disposable Income (DI)
_______ $
______
ROW
$244
$210
NFFI = $__

49. ROW $286 $190 NIA for 2007 NFFI = 96 -Capital Consumption
[18th Edition]
Personal taxes ,482 -Undistributed corp. profits 344
Exports ,625 -Social Security contrib
Imports ,333 Personal consumption ,734
+Transfer payments ,237 Gross private domes invest ,125
-Corporate income taxes Government purchases ,690
-Taxes on prod. & imports 1,009 Depreciation [capital consumption] ,687
Statistical Discrepancy N.F.F.I
NIA for 2007
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Capital Consumption
Net Domestic Product (NDP)
+Net Foreign Factor Inc. Earned in the U.S.
-Statistical discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on production & imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
9,734
2,125
2,690
-708
$13,841
-1,687
$12,154 96
-29
$12,221
-344
-467
-979
-1,009
+2,237
$11,659
-1,482
$10,177
ROW
$286
$190
NFFI = 96

50. ROW $286 $190 Quiz#3 NFFI = $__ Capital Consumption
Name_______________________
Personal taxes ,482 -Undistributed corp. profits 344
Exports ,625 -Social Security contrib
Imports ,333 Personal consumption ,734
+Transfer payments ,237 Gross private domes invest ,125
-Corporate income taxes Government purchases ,690
-Taxes on prod. & imports 1,009 Depreciation [capital consumption] ,687
Statistical Discrepancy N.F.F.I
Quiz#3
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
Capital Consumption
Net Domestic Product (NDP)
Net Foreign Factor Inc. Earned in the U.S.
Statistical discrepancy
National Income (NI)
Undistributed Corporate Profits
Corporate income taxes
Social Security Contributions
Taxes on production & imports
Transfer payments
Personal Income (PI)
Personal Taxes
Disposable Income (DI)
_______ $
______
ROW
$286
$190
NFFI = $__

51. ROW $286 $181 NIA for 2009 NFFI = 96 -Capital Consumption
[19th Edition]
Personal taxes ,102 -Undistributed corp. profits 418
Exports ,576 -Social Security contrib
Imports ,968 Personal consumption ,089
+Transfer payments ,528 Gross private domes invest ,628
-Corporate income taxes Government purchases ,931
-Taxes on prod. & imports 1,090 Depreciation [capital consumption] ,864
Statistical Discrepancy N.F.F.I
NIA for 2009
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
-Capital Consumption
Net Domestic Product (NDP)
+Net Foreign Factor Inc. Earned in the U.S.
-Statistical discrepancy
National Income (NI)
-Undistributed Corporate Profits
-Corporate income taxes
-Social Security Contributions
-Taxes on production & imports
+Transfer payments
Personal Income (PI)
-Personal Taxes
Disposable Income (DI)
10,089
1,628
2,931
-392
$14,256
-1,864
$12,392
105
-209
$12,288
-418
-315
-967
-1,090
+2,528
$12,026
-1,102
$10,924
ROW
$286
$181
NFFI = 96

52. ROW $286 $181 Quiz#4 NFFI = $__ Capital Consumption
Name________________________
Personal taxes ,102 -Undistributed corp. profits 418
Exports ,576 -Social Security contrib
Imports ,968 Personal consumption ,089
+Transfer payments ,528 Gross private domes invest ,628
-Corporate income taxes Government purchases ,931
-Taxes on prod. & imports 1,090 Depreciation [capital consumption] ,864
Statistical Discrepancy N.F.F.I
Quiz#4
C = $
Ig = $
G = $
Xn = $
Gross Domestic Product (GDP)
Capital Consumption
Net Domestic Product (NDP)
Net Foreign Factor Inc. Earned in the U.S.
Statistical discrepancy
National Income (NI)
Undistributed Corporate Profits
Corporate income taxes
Social Security Contributions
Taxes on production & imports
Transfer payments
Personal Income (PI)
Personal Taxes
Disposable Income (DI)
_______ $
_____
ROW
$286
$181
NFFI = $__

53. If this is Pat then this is “The End”.

54. NIA Answers NIA 1: $1938 [GDP of $2,883] [NDP of $2,566]
Quiz#1$ [GDP of $606] [NDP of $581]
Quiz#2 $9,038 [GDP of $606] [NDP of $10,913]
For 2007: $10, [NDP of $12,154]
For 2009: $10,924 [NDP of $12,392]
Homework: $1,658 [NDP of $2,246]