In the double-entry bookkeeping system used to track the economy, _____

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In the double-entry bookkeeping system, every transaction has two entries - a debit and a credit. The total value of all debits must equal the total value of all credits, which means that the value of aggregate output must equal the aggregate income paid for the resources used to produce that output. This principle is known as the fundamental accounting equation. Option B is incorrect because transfer payments create no new goods or services and are not included in the calculation of aggregate output. Option C is incorrect because only the earnings of publicly traded companies are recorded in the economy-wide accounting system, not the earnings of all shareholders. Option D is incorrect because inventories are only counted once, either as investment or as a component of final output. Option E is also incorrect because intermediate goods are only counted once as a component of final output.

In the Double-Entry Bookkeeping System Used to Track the Economy