Formulas Accompanied with GDP

Need to Know Formulas:
-Gross National Product (GNP): Total value of all final goods and services produced by Americans in a given year
      *Differs from GDP because goods produced in another country made by Americans are counted in GNP
           -Formula: GNP = GDP + Net Foreign Factor Payments

-Budget: Transfer Payments + Government purchase of goods/services - Government tax and fee collection
      * If the answer is NEGATIVE, budget SURPLUS exists; If the answer is POSITIVE, budget DEFICIT exists

-Trade: Exports - Imports
      * If the answer is POSITIVE, trade SURPLUS exists; If the answer is NEGATIVE, trade DEFICIT exists

-National Income (NI): Total income earned by resource suppliers for their contributions to GDP
     * 2 ways to Calculate National Income:
            1. CE + PI + RI + II + CP = NI
                  - CE = Compensation of Employees
                  - PI = Proprietors Income
                  - RI = Rental Income
                  - II =Interest Income (Net interest)
                  -CP = Corporate Profits

           2. NI = GDP - Indirect Business Taxes - Depreciation - Net Foreign Factor Payments

-Disposable Income (DPI):
     *DPI = NI - Personal Household Taxes + Government Transfer Payments

-Net Domestic Product (NDP):
     * NDP = GDP - Deprecation

-Net National Product (NNP):
     * NNP = GNP - Depreciation

Practice Time:

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