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JAMB Economics 2014 Question 49

Question 49

National Income

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

  1. A.number of farmers.
  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 expect to sell, so the total volume of output in an economy is set by the level of total spending (consumption, investment, government and net exports).