2. When the government reports GDP, the data is generally reported on an annual basis.
3. In addition, data are generally adjusted for regular seasonal changes (such as Christmas).
IV. FYI: Other Measures of Income
A. Gross National Product (GNP) is the total income earned by a nation’s permanent residents.
B. Net National Product (NNP) is total income of a nation’s residents minus losses from depreciation (wear and tear on an economy’s stock of equipment and structures).
C. National income is the total income earned by a nation’s residents in the production of goods and services. It is equal to net national income minus indirect business taxes.
D. Personal income is the income that households and noncorporate businesses receive.
E. Disposable personal income is the income that households and noncorporate businesses have left after taxes and other obligations to the government.
V. The Components of GDP
A. GDP (Y) can be divided into four components: consumption (C), investment (I),
government purchases (G), and net exports (NX).
B. Definition of Consumption: spending by households on goods and
services, with the exception of purchases of new housing.
C. Definition of Investment: spending on capital equipment, inventories,
and structures, including household purchases of new housing.
D. Definition of Government Purchases: spending on goods and services by
local, state, and federal governments.