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?????