The sum of compensation to employees, rental income, corporate profits, net interest, and proprietors' income is

Question

Quizplus · Accepted Answer

The sum of compensation to employees, rental income, corporate profits, net interest, and proprietors' income is called net domestic income at factor cost because it represents the income earned by domestic factors of production (labor, capital, and entrepreneurship) in the production process, minus any indirect taxes and subsidies. Gross domestic income includes indirect taxes and subtracts the cost of depreciation, which is not included in this sum. Net domestic product and gross domestic product are different measures of the value of goods and services produced in a country, but they do not directly measure income earned by factors of production.

The Sum of Compensation to Employees, Rental Income, Corporate Profits