Total income in an economy is equal to

Question

Quizplus · Accepted Answer

Total income in an economy is the sum of wages paid to labor, interest paid to capital, rent paid to landowners, and profit earned by businesses. This is also known as the four factors of production, and it represents the total value added to the economy. GDP includes all of these components, as well as net exports, so option A is not correct. Option B is also not correct, because taxes are subtracted from income to arrive at disposable income, which is not the same as total income. Option D is not correct, as firm revenues do not necessarily translate to total income for the economy as a whole.

Total Income in an Economy Is Equal to