National income can be calculated by subtracting
A)depreciation from GDP.
B)indirect business taxes from GDP.
C)depreciation and indirect business taxes from GDP.
D)transfer payments and taxes from GDP.

Question

Quizplus · Accepted Answer

National income is calculated by subtracting both depreciation and indirect business taxes from GDP. Depreciation represents the amount of capital that has been used up in the production process, while indirect business taxes include taxes such as sales taxes that are passed on to consumers in the form of higher prices. By subtracting these two values from GDP, we arrive at national income, which represents the total income earned by a country's residents in a given year.

National Income Can Be Calculated by Subtracting