The dollar value of final output
A) is less than total income.
B) is equal to total income.
C) is greater than total income.
D) equals profits.

Question

Quizplus · Accepted Answer

Total income includes all payments made to factors of production (i.e. wages, rent, interest, and profits), while final output measures the value of all goods and services produced within a specific period of time. Since every dollar of income earned by individuals and firms is eventually spent on final goods and services, the dollar value of final output is equal to total income. Thus, the correct answer is B.

The Dollar Value of Final Output