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COMPENSATION OF EMPLOYEES: The official item in the National Income and Product Accounts maintained by the Bureau of Economic Analysis measuring wages earned by the household sector for supplying labor services. This is one of five official factor payments making up national income. The other four are net interest, rental income of persons, corporate profits, and proprietors' income. Compensation of employees is far and away the largest of the five factor payments, typically running about 70% of national income.

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IEBNR: The abbreviation for income earned but not received. The three types of income earned but not received by the factors of production are Social Security taxes, corporate profits taxes, and undistributed corporate profits. In each case a factor of production has rightfully "earned" the income by contributing to valuable production contained in gross domestic product. However, because this income is not paid to the factor and it is not income received by the household sector. IEBNR is subtracted from national income to calculate personal income.

     See also | income | national income | personal income | corporate profits tax | undistributed corporate profits | gross domestic product | factors of production | household sector |


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FLEXIBLE EXCHANGE RATE

An exchange rate determined through the unrestricted interaction of supply and demand in the foreign exchange market. Also termed floating exchange rate, this is one of three basic exchange rate policies used by domestic governments to control their exchange rates with the goal of affecting international trade, balance of trade, and balance of payments. This policy is based on the view that the free interplay of market forces is most likely to generate a desireable pattern of international trade. The other two policies are fixed exchange rate and managed flexible exchange rate.

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