1. MEASURING NATIONAL OUTPUT AND NATIONAL INCOME

13. GDP, GNP, NNP, National Income, Personal Income and Disposable Income GDP Plus: receipts of factor income from the rest of the world Less: payments of factor income to the rest of the world Equals: GNP Less: depreciation Equals: NNP Less: indirect taxes minus subsidies plus other Equals: National Income Less: corporate profits minus dividends Less: social insurance payments Plus: personal interest income received from government and consumers Plus: transfer payments to persons Equals: personal income Less: personal taxes Equals: disposable personal income

18. A THREE GOOD ECONOMY Production Yr 1 Yr 2 Q1 Q2 Price/ Unit Yr 1 Yr 2 P1 P2 GDP in Yr1 in Yr1 Prices P1 x Q1 GDP in Yr2 in Yr1 Prices P1 x Q2 GDP in Yr 1 in Yr 2 Prices P2 x Q1 GDP in Yr 2 in Yr 2 Prices P2 x Q2 Good X 6 11 .50 .40 3.00 5.50 2.40 4.40 Good Y 7 4 .30 1.00 2.10 1.20 7.00 4.00 Good Z 10 12 .70 .90 7.00 8.40 9.00 10.80 12.10 nominal GDP in Yr 1 15.10 Real GDP in Yr2 18.40 Real GDP in Yr1 19.20 nominal GDP in Yr 2