According to the circular-flow diagram, GDP can be computed as payments firms ma
ID: 1146653 • Letter: A
Question
According to the circular-flow diagram, GDP
can be computed as payments firms make to factors of production plus revenues they receive from the sales of goods and services.
can be computed as the revenue firms receive from the sales of goods and services minus the payments they make to factors of production.
can be computed as either the revenue firms receive from the sales of goods and services or the payments firms make to factors of production.
can be computed as the payments firms make to factors of production, but not as revenues they receive from the sales of goods and services.
a.can be computed as payments firms make to factors of production plus revenues they receive from the sales of goods and services.
b.can be computed as the revenue firms receive from the sales of goods and services minus the payments they make to factors of production.
c.can be computed as either the revenue firms receive from the sales of goods and services or the payments firms make to factors of production.
d.can be computed as the payments firms make to factors of production, but not as revenues they receive from the sales of goods and services.
Explanation / Answer
According to the circular flow-diagram, GDP
Correct answer will be option C. CAN BE COMPUTED AS EITHER THE REVENUE FIRMS RECEIVE FROM THE SALES OF GOODS AND SERVICES OR THE PAYMENTS FIRMS MAKE TO THE FACTORS OF PRODUCTION.
According to the methods of calculating GDP in national income, the national income is calculated either in income method or in expenditure method. Revenue the firms receive from the sale of goods and services is income method. Payment firms make to factors of production is otherwise known as expenditure method. Separately national income can be calculated in both the methods.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.