It is a national income accounting rule that all expenditure on purchases of products is necessarily equal to:
A)profits of firms.
B)wages of employees.
C)income of the producers of the products.
D)income of employees.

Question

Quizplus · Accepted Answer

This is the basic principle of national income accounting known as the expenditure approach, which states that all expenditure on final goods and services (i.e. purchases by households, firms, government, and exports) is equal to the income earned by the producers of those goods and services. This includes not only profits and wages, but also rent, interest, and other forms of income earned by the factors of production.

It Is a National Income Accounting Rule That All Expenditure