Using the income approach to calculating GDP, in a simple closed economy, the national income equals:
A) wages + interest + rental income + profits.
B) wages + interest + government income + profits
C) wages + government spending + earned interest + investment + profits
D) wages + interest + rental income - profits.

Question

Quizplus · Accepted Answer

The income approach to calculating GDP adds up all income earned by individuals and businesses in the economy. This includes wages paid to workers, interest earned on investments, rental income earned by property owners, and profits earned by businesses. Therefore, the national income in a simple closed economy equals wages + interest + rental income + profits, which is option A.

Using the Income Approach to Calculating GDP, in a Simple