Measuring Total Output and Income
6.2 Measuring Total Income
ANSWER TO TRY IT! PROBLEM
GDI equals $1,200. Note that this value equals the value for GDP obtained from the estimate of output in the first part of the previous Try It! Here is the computation:
Employee compensation | $700 |
Profits | 200 |
Rental income | 50 |
Net interest | 25 |
Depreciation | 50 |
Indirect taxes | 175 |
GDI | $1,200 |
Once again, note that Social Security and welfare payments to households are transfer payments. They do not represent payments to household factors of production for current output of goods and services, and therefore are not included in GDI.