|
|
AGGREGATE EXPENDITURE DETERMINANTS: An assortment of ceteris paribus factors that affect aggregate expenditures, but which are assumed constant when the aggregate expenditure line is constructed. Changes in any of the aggregate expenditures determinants cause the aggregate expenditure line to shift. While a wide variety of specific ceteris paribus factors can cause the aggregate expenditure line to shift, it's usually most convenient to group them into the four, broad expenditure categories -- consumption, investment, government purchases, and net exports. The reason is that changes in these expenditures are the direct cause of shifts in the aggregate expenditure line. If any determinant affects aggregate expenditures it MUST affect one of these four expenditures.
Visit the GLOSS*arama
|
|
|
|
                           CORPORATE PROFITS: The total accounting profits received by corporations. Corporate profits are the official item in the National Income and Product Accounts maintained by the Bureau of Economics Analysis that measures profit earned by the household sector for supplying entrepreneurship services through corporations, and to some degree capital and land services, too. This is one of five official factor payments making up national income. The other four are compensation of employees, rental income of persons, net interest, and proprietors' income. Corporate profits the second largest factor payment category, usually coming in around 20 to 25 percent of national income. As accounting profits, corporate profits are the difference between total revenue and total explicit accounting costs, and they may or may not correspond closely to economic profit. Corporate profits are separated into three categories: (1) retained earnings (undistributed corporate profits), (2) dividends (distributed corporate profits), and (3) taxes (corporate profits taxes or corporate profit taxes). Dividends, the proportion paid to the household sector, is usually about one-third of corporate profits, give or take a few billion dollars.Somewhere in the deep recesses in the history of the development of the National Income and Product Accounts, someone likely surmised that corporate profits were an appropriate way to measure the services of entrepreneurship. And without question, a portion of corporate profits compensates entrepreneurs for their risk-taking and organizational activities. However, a sizeable portion of corporate profits compensates shareholders for their ownership of capital and land, as well. While some of the capital, land, and natural resources used by corporations are compensated with interest payments on borrowed funds, rent and royalty payments, a fair amount of compensation for these resources are in the form of corporate profits. Because a portion of corporate profits is payment for the use of capital goods, it receives a capital consumption adjustment before being included as national income. The capital consumption adjustment is part of gross domestic product, but not part of national income. As such, any depreciation of the capital used by corporations is deducted before calculating the corporate profits.
Recommended Citation:CORPORATE PROFITS, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: July 26, 2024].
Check Out These Related Terms... | | | | | | | | | |
Or For A Little Background... | | | | | | | | |
And For Further Study... | | | | | | | | | | | |
Related Websites (Will Open in New Window)... | |
Search Again?
Back to the WEB*pedia
|
|
|
BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time driving to a factory outlet seeking to buy either storage boxes for your computer software CDs or a set of tires. Be on the lookout for bottles of barbeque sauce that act TOO innocent.
Your Complete Scope
This isn't me! What am I?
|
|
|
In the Middle Ages, pepper was used for bartering, and it was often more valuable and stable in value than gold.
|
|
|
"Old age isn't so bad when you consider the alternative. " -- Cato, Roman orator
|
|
RJE
RAND Journal of Economics
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
