National Income

The GDP minus depreciation on a country's capital goods. This measure allows users of the country's national accounts to estimate how much the country has to spend just to maintain their current GDP. If the country is not able to replace the capital stock lost through depreciation, then GDP will fall. In addition, a growing gap between GDP and Net Domestic Product indicates increasing obsolescence of capital goods, while a narrowing gap would mean that the condition of capital stock in the country is improving. The income earned by a country's people, including labor and capital investment. National income measures the money value of the flow of output of goods and services produced within an economy over a period of time. An individual's total annual gross earnings coming from wages, business enterprises and various investments is its personal income. The amount of income left to an individual after taxes have been paid, available for spending and saving is disposable income.

disposable income Portion of an individual's income over which the recipient has complete discretion. To assess disposable income, it is necessary to determine total income, including not only wages and salaries, interest and dividend payments, and business profits, but also transfer income such as social-security benefits, pensions, and alimony. Obligatory payments, including personal income taxes and compulsory social-insurance contributions, must be subtracted.