If GDP rises, what happens to income and expenditure?
A) Income must rise and expenditure must rise.
B) Income must fall and expenditure must fall.
C) Income must rise, but expenditure may rise or fall.
D) Expenditure must rise, but income may rise or fall.

Question

If GDP rises, what happens to income and expenditure?  
A) Income must rise and expenditure must rise. 
B) Income must fall and expenditure must fall. 
C) Income must rise, but expenditure may rise or fall. 
D) Expenditure must rise, but income may rise or fall.

Quizplus · Accepted Answer

GDP (Gross Domestic Product) measures the total value of all goods and services produced over a specific time period within a country. It is often used as an indicator of the economic health of a country. When GDP rises, it means there is an increase in the production and consumption of goods and services, which directly leads to an increase in income (as businesses and individuals earn more from the higher level of economic activity) and expenditure (as they spend more). Therefore, both income and expenditure must rise with an increase in GDP.

If GDP Rises, What Happens to Income and Expenditure