The approach to GDP that sums compensation of employees, rental income, corporate profits, net interest, proprietors' income, depreciation, and indirect taxes and subtracts subsidies is the

Question

Quizplus · Accepted Answer

The given approach describes the components of GDP in terms of the income generated by different factors of production. It includes compensation of employees, rental income, corporate profits, net interest, proprietors' income, depreciation, and indirect taxes minus subsidies. Hence, it is known as the income approach. The other options, i.e., added cost approach and opportunity cost approach are not valid methods for calculating GDP, and the expenditure approach sums up the final goods and services purchased by households, businesses, governments, and foreigners.

The Approach to GDP That Sums Compensation of Employees, Rental