Question 3
National IncomeIn calculating national income using the income approach, the items included are
- A.allowances paid to unemployed people
- B.differences between cost of inputs and price of outputs
- C.total spending by consumers, firms and government
- D.rent, wage, interest and profit paid to factor inputs
Show the answer and explanation
Answer: D (rent, wage, interest and profit paid to factor inputs)
Explanation
The income approach adds the rewards of the factors of production: rent, wages, interest and profit.