Income
Income may be national income and personal income. Whereas national income is defined as the total earned income of all the factors of production-namely, profits, interest, rent, wages, and other compensation for labor, personal income may be defined as total money income received by individuals before personal taxes are paid. National income does not equal GNP (Gross National Product) because the factors of production do not receive payment for either capital consumption allowances or indirect business taxes, both of which are included in GNP. The money put aside for capital consumption is for replacement and thus is not counted as income. Indirect taxes include sales taxes, property taxes , and excise taxes that are paid by businesses directly to the government and so reduce the income left to pay for the factors of production. Three-fourths of national income goes for wages, salaries, and other forms of compensation to employees.
Whereas national income shows the income that the factors of production earn, personal income measures the income that individuals or households receive. Corporation profits are included in national income because they are earned. Out of these profits, however, corporation profit taxes must be paid to the government, and some money must be put into the business for expansion. Only that part of profits distributed as dividends goes to the individual; therefore, out of corporation profits only dividends count as personal income. The factors of production earn money for social security and unemployment insurance contributions, but this money goes to government (which is not a factor of production), not to individuals. It is therefore part of national income but not part of personal income.
On the other hand, money received by individuals when they collect social security or unemployment compensation is not money earned but money received. Interest received on government bonds is also in this category, because much of the money received from the sale of bonds went to pay for war production and that production no longer furnishes a service to the economy.
The money people receive as personal income may be either spent or saved. However, not all spending is completely voluntary. A significant portion of our income goes to pay personal taxes. Most workers never receive the money they pay in personal taxes, because it is withheld from their paychecks. The money that individuals are left with after they have met their tax obligations is disposable personal income. Disposable income can be divided between personal consumption expenditures and personal savings. It is important to remember that personal saving is what is left after spending.
A、the difference between national income and GNP
B、the difference between national income and personal income
C、the concept of income
D、the difference between disposable income and nondisposable income
您可能感興趣的試卷
你可能感興趣的試題
最新試題
It was reported that one lady had got her head and neck injured, but not seriously.()
___10___內(nèi)選項(xiàng)為()
請(qǐng)根據(jù)下列材料寫二篇150詞左右的英語短文。Nowadays, there appears a phenomenon that the western customs are spreading into the east countries step by step, thus making many inhabitants who live in big cities enjoy themselves on these western festivals such as Christmas Day, April Fool's Day, etc. What is your opinion?
Many walls and chimneys were damaged during this quake.()
___3___內(nèi)選項(xiàng)為()
It can be inferred from the passage that England is rarely hit by high magnitude earthquakes.()
The April 28 quake was stronger than the one of 2002.()
If your job offers you little stimulation, there are steps you can take()
___6___內(nèi)選項(xiàng)為()
If you′re bored with your job, it shows that you′ve mastered()