National income of a country is based on ?
Correct answer: B. The sum of all factors of income
- A. The taxes earned by the State
- B. The sum of all factors of income
- C. Personal incomes of all the citizens
- D. Surplus of exports over imports
Explanation
National income is the total income earned by the factors of production, including wages, rent, interest and profit. Taxes and the trade balance are separate national-accounting items, while personal income is only one related measure.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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