Expenditure Approach and Income Approach

Expenditure approach: adding up the market value of all domestic expenditures made on all final goods and services in a single year
Formula: GDP = C + Ig + G + Xn

Income Approach: adding up all the income earned by households and firms in a single year
Formula: GDP = W + R + I + P + Statistical Adjustments
-W: wages, salaries, compensation of employees
-R: rents, tenants to landlords, lease payments that corporations pay for the use of space
-I: interest, money paid by private businesses to the suppliers of loans used to purchase capital
-P: profit, corporate income taxes, dividends, undistributed corporate profits


*FORMULAS*
Budget: 
government purchases of goods and services + government transfer payments - government tax and fee collections
-if it is negative it is a budget surplus, if it is positive, it is a budget deficit

Trade:
 exports - imports
-if it is negative it is a trade deficit, if it is positive, it is a trade surplus

National Income: 

• GDP - indirect business taxes - depreciation - net foreign factor payment
• Compensation of employees + rental income + interest income + proprietor's income + corporate profits

Disposable Personal Income: 

National income - personal household taxes + government transfer payments

Gross National Product (GNP): 
GDP + net foreign factor income

National Net Product (NNP):
GNP - depreciation

National Domestic Product (NDP):
GDP - depreciation