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JAMB Economics 1989 Question 48

Question 48

National Income

If C stands for consumption expenditure, I for investment, X for exports, and M for imports, then national income is

  1. A.C + I + X + M
  2. B.C + I + X − M
  3. C.C + I − X + M
  4. D.C + I + X.
Show the answer and explanation

Answer: B (C + I + X − M)

Explanation

National income by expenditure = consumption + investment + net exports, i.e. C + I + (X − M).