Using the income approach, an estimate of the value of capital worn out producing GDP is:

Question

Quizplus · Accepted Answer

The income approach to measuring GDP takes into account the compensation of employees, taxes on production and imports, and the capital consumption allowance or depreciation. This depreciation expense reflects the value of capital that has been worn out or used up in the production process. Therefore, the estimate of the value of capital worn out producing GDP is the capital consumption allowance or depreciation.

Using the Income Approach, an Estimate of the Value of Capital