[ikhan89]

Hello,

I’m using Becker’s review and in their review, they didn’t have an item labeled as “Net income earned abroad for the country”. Where does this fit into the calculation for NDP, National Income, Personal income?

Since it’s listed as 0 on ninja MCQ, I wasn’t able to figure out since it was not part of the calculations.

Information related to the financial transactions for a country is given as follows with values stated in billions of dollars.

— Gross domestic product (GDP) $4,000

— Transfer payments 500

— Corporate income taxes 50

— Social Security contributions 200

— Indirect business taxes 210

— Personal income taxes 250

— Undistributed corporate profits 25

— Depreciation 500

— Net income earned abroad for the country 0

National income is:

Thanks..

[Biff-1955-Tannen]

From my understanding through Ninja:
Gross Domestic Product
– Depreciation
= Net Domestic Product
– Indirect business taxes
– Income earned abroad
= Net National Income
– Corporate taxes
– Social Security Contributions
– Undistributed corporate profits
+ Transfer payments
= Personal Income
– Personal taxes
= Disposable Income

AUD - 93
BEC - 83
FAR - 83
REG - 84

Nobody calls me chicken

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[ikhan89]

Hmm I'm confused because I thought Net National Income would have included income from domestic corporations operating in foreign areas… and you would subtract foreign companies in domestic country.??

Edit: I looked at another another question explanation and it says

National income (NI) is defined as net domestic product (NDP), plus net income earned abroad, minus indirect business taxes (e.g., sales taxes). NDP is gross domestic product ($4,000) minus depreciation ($500), or $3,500. Thus, national income is $3,290 ($3,500 NDP + $0 net income earned abroad – $210 indirect business taxes).

Net domestic product $3,500
Net income earned abroad 0
Indirect business taxes (210)
——
National income $3,290

So income earned abroad is added…. now I wonder why becker says subtract net foreign factor income -> I'm going to assume that saying subtract foreign income earned in domestic country and add domestic income earned in foreign?? (like for GDP add exports subtract imports)

[Biff-1955-Tannen]

AUD - 93
BEC - 83
FAR - 83
REG - 84

Nobody calls me chicken

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[Biff-1955-Tannen]

I looked around a bit and it looks like you are right.

https://thismatter.com/economics/national-accounts.htm

This says to subtract net foreign factor income, (which is income earned by foreigners in the United States minus the income earned by Americans abroad). So if income earned by Americans abroad is greater than income earned by foreigners in the U.S., you would essentially be adding the net of the two.

EDIT: You beat me to it, but by chance my post now answers your second question.

AUD - 93
BEC - 83
FAR - 83
REG - 84

Nobody calls me chicken

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[ikhan89]

Thanks for looking into it. Hopefully this will help on the exam (if you are taking bec too =D)

[ikhan89]

Thanks for looking into it. Hopefully this will help on the exam (if you are taking bec too =D)

[Author]

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