Consider a small economy with 3 individuals where each individual produces and sells $1000 worth of final goods and services.The national income for this economy is
A)$3000.
B)less than $3000 if some of the income is saved.
C)more than $3000 if some of the income is invested.
D)less than $3000 if there are taxes in this economy.
E)more than $3000 if the individuals are earning profits.

Question

Quizplus · Accepted Answer

The national income of the small economy is simply the sum of the income of each individual, which is $1000 each. Therefore, the national income is $3000.

Consider a Small Economy with 3 Individuals Where Each Individual