ECONOMICS
BUSINESS CYCLES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
What is the formula for calculating GDP if using the income approach?
|
|
consumption + investment + government spending + net exports
|
|
|
wages + interest + rent + profit
|
|
|
add up all values added to the good
|
|
|
none of these
|
Explanation:
Detailed explanation-1: -GDP = Wages + Rent + Interest + Profits. Q. Which goods and services are added to calculate GDP according to the income method?
Detailed explanation-2: -By income approach, Value added = Compensation of employees + Mixed income + Other taxes less subsidies on production + Gross operating surplus. With: Gross operating surplus = Net operating surplus + Consumption of fixed capital.
Detailed explanation-3: -GDP can be measured in three different ways: the value added approach, the income approach (how much is earned as income on resources used to make stuff), and the expenditures approach (how much is spent on stuff).
There is 1 question to complete.