The factor income approach to calculating GDP can be summarized as the summation of
A) consumption, investment, government purchases, and exports.
B) consumption, investment, government purchases, and net exports.
C) wages, interest, rent, and profit.
D) wages, investment, rent, and profit.

Question

Quizplus · Accepted Answer

The factor income approach measures GDP as the sum of wages, interest, rent, and profit earned by individuals and businesses in the production of goods and services. The other options list components of GDP, but not the factor incomes that make up GDP.

The Factor Income Approach to Calculating GDP Can Be Summarized