# Disposable income - is ... The amount of disposable income.

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disposable income - is indicative that characterizes the relationship with other macroeconomic indicators of GDP.This list, in addition to national income, yet includes: net domestic product and personal income.As a percentage of disposable personal income - a 71.5 per cent of the GDP (for example, this figure is celebrated in the United States).

## calculation of disposable income

Calculate income can be quite simple.To do this, you must know the indicators such as GDP, depreciation charges, the amount of indirect taxes, the profit entities by the net interest and dividends, interest, households and individual taxes and fees.

by simple mathematical operations (addition and subtraction) is disposable personal income.This can be represented by a formula:

• JPL = GDP - as - KH + A - PC - PP + DD + PD - IN - Security where

SA - depreciation;
CN - indirect taxes;
D - income derived from the algebraic difference of income generated abroad by residents and non-residents in the state;

PC - profit corporations;
PE - net interest;
DD - dividends received by households;
PD - interest earned by households;
IN - individual taxes;
SB - savings.

## Auxiliary terminology

considering related indicatives of this indicator, it is necessary to clarify the following.

Net domestic product is obtained by subtracting the depreciation of the GDP and the sum of indirect taxes, less the value of certain subsidies.This figure exceeds the national disposable income.

Personal income includes the total amount of household income without deduction of tax paid by them.This disposable personal income - the sum received after payment of all individual taxes.Thus, the latter figure shows the share of GDP produced in the country by households for savings and current consumption.

## gross disposable income

This indicative market prices is equal to the total gross national income with the addition of balance transfers, which are derived from a variety of non-residents or handed over to them in the form of donations, donations and humanitarian aid.Thus, it is accumulating rate of all sectors of the economy.

next indicator - net disposable national income - is the difference between the previous rate and consumption of fixed capital.In general, the formula becomes:

• CHRND = VRND - SSV.

This macro displays the value of the amount of income that can be used by residents of the state on personal consumption expenditures, or postponed to accumulate.

Personal consumption expenditures include all costs related to the acquisition of goods and services by households is, as well as the costs of various state organizations and public non-profit institutions that are responsible for maintaining the household.

## secondary distribution of income

As mentioned above, all macroeconomic indicators are closely connected with each other and formed in a strict sequence.

For all types of income redistribution completes the formation of disposable income, adjusted by sectors of the economy.It differs from the corresponding gross figure on the value of social transfers in kind.The structure of the latter contains the following items: social benefits, expressed in kind (for example, the cost of social security funds for medical care);Production of non-commercial state bodies and non-profit organizations that serve the households;products purchased directly from the manufacturers in order to provide it to households free of charge or at a formal price.

## Comparison macro

In general, the magnitude of disposable income and adjusted the same as the same period.This is due to the fact that an immediate correction is performed by sectors of the state economy.At the same time social transfers in kind should not affect the financial and non-financial businesses.

This adjustment is carried out in the context of the three major sectors of the economy: households, public administration organizations and non-profit organization responsible for maintaining the household.

With regard to the sectors of public administration and non-profit organizations mentioned above, the amount of disposable income is equal to the difference between the respective values ​​of each individual sector and the amount of social transfers in kind.

Adjusted income in the household sector can be determined by adding to the amount already received index in the previous two sectors transfers.

## relationship

indicators referred to in this article are the structural elements of the macro system of national accounts.They can use the following tasks:

• numbered generalizing statistical indicators that characterize the economic performance;
• investigate the dynamics of macroeconomic indicators;
• to analyze different macroeconomic proportions.

At the heart of all macroeconomic modeling process is the relationship of national disposable income to other indicators of the state of the economy.Thus formed model can be used to justify the financial and management decisions at different levels of the economy (micro, meso and macro).

## value of disposable income

Summarizing the material presented in this article, it should be noted that the disposable national income - is a resource that can be used for personal consumption of households, as well as government agencies.