IncomeIncome may be national income and personal income. Whereas national income is define
Income
Income may be national income and personal income. Whereas national income is defined asthe total earned income of all the factors of production--namely, profits, interest, rent, wages, andother corn pensation for labor, personal income may be defined astotal money income received byindividuals before personal taxes are paid. National income does not equal GNP (Gross NationalProduct)because the actors of production do not receive payment for either capital consumptionallowances or indirect businesstaxes,both of which areincluded in GNP. The money put asidefor5capital consumption is for replacement and thus is not counted as income. Indirect taxes includesalestaxes property taxes and excise taxes that are paid by businessesdirectly to the governmentand so reduce the income left to pay for the factors of production. Three-fourths of nationalincome goesfor wages,salaries, and other forms of compensation to employees.
Whereas national income shows the income that the factors of production earn personalincome measures the income that individuals or households receive. Corporation profits areincluded in national income because they are earned. Out of these profits, however, corporationprofit taxes must be paid to the government, and some money must be put into the business forexpansion. Only that part of profits distributed asdividends goesto the individual there fore out ofcorporation profits only dividends count as personal income. The factors of production earnmoney for social security and unemployment insurance contributions, but this money goes togovernment(which is not a factor of production), not to individuals. It is therefore part of nationalincome but not part of personal income.
On the other hand money received by individuals when they collect social security orunemployment compensation is not money earned but money received. Interest received ongovernment bonds is also in this category, becausemuch of the money received from the sale ofbonds went to pay for war production and that production no longer furnishes a service to theeconomy. The money people receive aspersonal income may be either spent or saved.However not allspending is completely voluntary. A significant portion of our income goes to pay personal taxes. Most workers never receive the money they pay in persona] taxes, because it is withheld fromtheir paychecks. The money that individuals are left with after they have met their tax obligationsis disposable personal income.
Disposable income can be divided between personalconsumption expenditures and personal savings. It is important to remember that personal savingis what is left after spending.
1、This passageis mainly about ()
A.the difference between nationa and GNP
B.the difference between national income andpersonal income
C.the concept of income
D.the difference between disposable income and nondisposahle in-come
Which of the following statementsis true according to the first paragraph? ()A.GNP equals national income plus indirect businesstaxes.
B.GNP excludes both capital consumption allowances andindirect businesstaxes.
C.Personal income is regarded as the total money income received by an individual after his orher taxes arepaid.
D.The money that goesfor capital consumption is not regardedas income.
According to this passage,the money you get asinterest from government bonds is ()A.the money earned
B.the money not earnedbut received
C.the money received for the contribution you have made to the economy
D.the money earnedfor the service you have furnished to the economy
The passageimplies that ()A.people willingly pay taxes becausethey want to do something useful to the country
B.people willingly pay taxes becausethey do not want to be looked down upon by others
C.people paytaxes unwillingly becausethey feel they will be arrestedif they do not
D.people pay taxessomewhat unwillingly
It can be easily seenfrom this passagethat the government levies tax on . ()A.eorporation profits
B.every individual eventhough his income is very low
C.those who work in joint ventures
D.those who work in government departments
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