AP Macroeconomics - Arlington Public Schools

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Oct 28, 2013 (3 years and 10 months ago)

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AP Macroeconomics


Daily Focus Objective or Question:


How does the Income Approach differ
from the Expenditure Approach?

Mr. Eric W. Breighton Underhill, All Rights Reserved

Arlington Public Schools, Yorktown High School

The Income Approach




“The method that adds all the income
generated by the production of final goods
and services to measure the gross
domestic product” (McConnell G11)

Compensation



Wages (business and government)


The largest portion of national income


Benefit Payments


Insurance Programs


Pension Funds


Flexible Spending Accounts


General Welfare Funds for Workers

Rents


Income that is directly related to property
resources


Collected by either households or
businesses who own the property
resource


Net Rent = Gross Rental Income


Depreciation of Property Value

Interest


Income made by financial institutions on
money


Interest on Savings Accounts


Bond Interest


Certificates of Deposit


Proprietors’ Income


“Profits is broken down by the national
income accountants into two accounts:
proprietors’ income …. and corporate
profits.” (McConnell 112)



Net Income from Sole Ownership


Net Income from Partnership


Unincorporated Businesses

Corporate Profits


These profits can be divided into 3
subcategories


Income taxes



Dividends



Undistributed Profits

Taxes on Production and Imports


Sales Taxes


(at the register)


Excise Taxes


(weight tax for trucks on
495)


Business Property Taxes


(on the
building)


Licenses (professional & permission)


Customs Taxes (when you travel & import
items into the USA)