ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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workers’ wages
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money paid for the use of land
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the remaining income after all expenses have been paid out
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money paid to people that lend money to the business
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Detailed explanation-1: -The income approach to calculate gross domestic product (GDP) sums the compensation of employees, taxes on production and imports less subsidies on production, gross operating surplus and mixed income.
Detailed explanation-2: -From the National Income, which is earned by the firms and government enterprises, a part of profit is not distributed among the factors of production. This is called Undistributed Profits (UP).
Detailed explanation-3: -The expenditure method is the most widely used approach for estimating GDP, which is a measure of the economy’s output produced within a country’s borders irrespective of who owns the means to production. The GDP under this method is calculated by summing up all of the expenditures made on final goods and services.
Detailed explanation-4: -The expenditure approach adds up the value of purchases made by final users-for example, the consumption of food, televisions, and medical services by households; the investments in machinery by companies; and the purchases of goods and services by the government and foreigners.