The largest component of national income is
A) compensation of employees.
B) rents.
C) interest.
D) corporate proﬁts.

Question

Quizplus · Accepted Answer

According to the national income accounting identity, the largest component of national income is compensation of employees, which includes wages, salaries, and benefits paid to workers. This is because labor is the primary factor of production and generates the most income in the economy. The other options - rents, interest, and corporate profits - are also important components of national income but are smaller in comparison to compensation of employees.

The Largest Component of National Income Is