Explain how disposable personal income is derived from Gross Domestic Product

What will be an ideal response?


Gross domestic product is the same thing as gross domestic income. National income is found by taking NDP and adding net U.S. income earned abroad and other business income adjustments less indirect business taxes and transfers. Personal income is found by subtracting income earned but not received (corporate taxes, Social Security contributions, and corporate retained earnings) and adding in government transfer payments. Subtracting all personal income taxes and nontax payments generates disposable personal income.

Criminal Justice

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