If an economy produces final output worth $5 trillion, then what is the amount of gross income generated by that production?

Question

Quizplus · Accepted Answer

Gross income is defined as the total income earned by all the factors of production involved in producing the final output. Therefore, the amount of gross income generated by the production of final output worth $5 trillion is also $5 trillion. Option A is incorrect because taxes are not included in gross income. Option C is incorrect because profits are a part of gross income. Option D is incorrect because it is not possible for the gross income to be more than the final output value.

If an Economy Produces Final Output Worth $5 Trillion, Then