Using the Income Approach to Calculating GDP, in a Simple

question 54

Multiple Choice

Using the income approach to calculating GDP, in a simple closed economy, the national income equals:

• A) wages + interest + rental income + profits.
• B) wages + interest + government income + profits
• C) wages + government spending + earned interest + investment + profits
• D) wages + interest + rental income - profits.

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Definitions:

Rate of Return

A measure of the gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Cram-Down Round

A financing round typically at a lower valuation, in which existing shareholders have their shares diluted if they do not participate.

Founders' Ownership

The proportion of a company's equity that is owned by its original creators or founders.

Dilution

A reduction in the ownership percentage of a share of stock caused by the issuance of new shares.