Income method Flashcards
1
Q
1) GDP =
A
rent + wages + interest + profit
2
Q
2) GDP =
A
tot national income + sales taxes+ depreciation + net foreign factor income
3
Q
tot national income =
A
sum of all wages, rent, interest and profits
4
Q
sales taxes
A
Consumer taxes imposed by the govt on the sale of g/s
5
Q
depreciation
A
cost allocated to a tangible asset over its use for life
6
Q
Net foreign factor income
A
The difference between the tot income that a country’s citizen and companies generate in foreign countries vs the total income foreign citizens and companies generate in the domestic country
7
Q
What is functional distribution of income
A
When NI is calculated by adding up the value of all the four factor incomes
