Real GDP
A) is always greater then aggregate income.
B) is equal to aggregate income.
C) might be less than or more than aggregate income depending on consumption.
D) is always less than aggregate income.

Question

Quizplus · Accepted Answer

Real GDP measures the total value of all goods and services produced in an economy in a given period of time, while aggregate income measures the total income earned by all individuals in the same period. Since every dollar earned by individuals represents a dollar spent on goods and services, the two measures should be equal in theory. However, in practice, there may be some discrepancies due to factors such as taxes, subsidies, and international trade. Therefore, the best choice is B, which states that real GDP is equal to aggregate income.