Gross investment expenditures consist of machinery and equipment purchases, financing of buildings and fixtures, and inventory purchases. Government Expenditures includes federal, state and local government purchases of goods and services, but excludes transfer payments. Rents are payments received by suppliers of property resources, including landowners. Interest includes payments to suppliers of money capital, such as interest earned on savings deposits, certificates of deposit and corporate bonds. The incomes of unincorporated business and corporations are included in profit.
Corporate profits consist of corporate income taxes, dividends and retained earnings.
Assuming that national households are paid wages, interest, rents and profit, the summation of these income figures will equal net national income. To convert national income to domestic income, net foreign income must be added to wages, interest, rents and profit. To convert net income to gross income, depreciation should be added to wages, interest, rents and profit. Indirect taxes must also be added to net national income, since indirect taxes are included in consumption expenditures, for example. To show this, we decomposed total industrial output into two types of goods intermediate goods and final goods.