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WAEC Economics 2012 Question 34

Question 34

National Income

If Y = Income, C = Consumption, I = Investment, X = Export and M = Import, then national income is

  1. A.Y = C − I + (x + m).
  2. B.Y = C + I + (x + m).
  3. C.Y = C + I + (x − m).
  4. D.Y = C + I + (m − x).
Show the answer and explanation

Answer: C (Y = C + I + (x − m).)

Explanation

By the expenditure method, Y = C + I + (X − M) (net exports), plus G where government is included.