In macroeconomics, if the value of the national product increases, there is
A)a decrease in the value of income claims on that output, due to importing.
B)an even larger increase in the value of income claims on that output, due to value added.
C)an equal increase in the value of income claims on that output.
D)a decrease in the value of income claims on that output, due to household saving.
E)a decrease in value of income claims on that output, due to taxation.

Question

Quizplus · Accepted Answer

When the value of the national product increases, there is an equal increase in the value of income claims on that output. This is because the national product measures the total value of goods and services produced within a country's borders, and income claims represent the income generated by the production of those goods and services, including wages, profits, and taxes. As the value of the national product increases, so does the income generated by its production, leading to an equal increase in income claims.

In Macroeconomics, If the Value of the National Product Increases