Gross Domestic Income (GDI) measures the total income generated by a country. It provides an alternative perspective to Gross Domestic Product (GDP) by focusing on the income earned by various entities, including individuals, businesses, and the government. GDI takes into account all income sources, such as wages, salaries, profits, rents, and taxes.
GDI differs from GDP, which values production by the amount of output that is purchased, in that it measures total economic activity based on the income paid to generate that output. In other words, GDI aims to measure what the economy makes or “takes in” (like wages, profits, and taxes) while GDP seeks to measure what the economy produces (goods, services, technology).
If Gross Domestic Income (GDI) is increasing, it generally indicates positive economic growth and prosperity. An increase in GDI implies that the total income generated within a country is expanding. This can be attributed to various factors such as rising wages, increased business profits, higher tax revenues, and overall economic activity. The opposite is true for a declining GDI, which usually happens during recessions. This can easily be visualized by looking at the %YoY change.
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Disclaimer: The information presented within this video is NOT financial advice.