The Income Approach Measures GDP by Adding Together Compensation of Employees

question 353

Multiple Choice

The income approach measures GDP by adding together compensation of employees, proprietorsʹ income,_________ .

• A) net investment, saving, and farmersʹ income
• B) net investment, rental income, and corporate profits
• C) net interest, rental income, and corporate profits
• D) net saving, investment income, and profits

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Definitions:

Opportunity Cost

This represents the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Book Value

The net value of a company's assets minus its liabilities, as recorded on the balance sheet, often compared to its market value.

CCA Depreciation

CCA Depreciation, or Capital Cost Allowance depreciation, is a method of depreciation used for tax purposes in Canada, allowing businesses to deduct the cost of capital assets over a period of time.

Straight-Line Depreciation

A plan for parceling out the expense of a physical asset throughout its active life in uniform yearly amounts.