National income equals GDP minus depreciation, which represents the amount of capital stock used up in producing goods and services during a given period of time. It is not equal to total wages and salaries (A), nor GDP minus indirect business taxes (B) or the overall expenditure formula (D), nor the value of existing capital stock (E).

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National Income

Question 107

Multiple Choice

National income:

A) represents total wages and salaries in an economy.
B) equals GDP minus indirect business taxes.
C) equals GDP minus depreciation.
D) equals C + I + G + (X − M) .
E) is the value of existing capital stock used up in making goods.

Correct Answer: