National income is calculated by subtracting ____ from GDP:

Question

Quizplus · Accepted Answer

National income is the total income earned by a country's factors of production, which include labor and capital. To calculate national income, we need to subtract depreciation (the decline in value of capital goods over time due to wear and tear) from GDP. This is because GDP includes the value of all final goods and services produced in a country, including the amount used to replace worn-out capital goods. By subtracting depreciation, we can arrive at the actual income earned by factors of production.

National Income Is Calculated by Subtracting ____ from GDP