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JAMB Economics 1997 Question 44

Question 44

National Income

The major determinant of the total volume of output in an economy is the

  1. A.level of wholesale prices
  2. B.size of the labour force
  3. C.level of total expenditure
  4. D.composition of consumer spending.
Show the answer and explanation

Answer: C (level of total expenditure)

Explanation

Firms produce what they can sell, so total spending (aggregate demand) determines total output in the economy.