What Should Be Subtracted from GDP to Calculate National Income

question 252

Multiple Choice

What should be subtracted from GDP to calculate national income?

• A) depreciation
• B) indirect taxes
• C) personal income taxes
• D) net factor payments to the rest of the world

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Definitions:

Operating Cash Flow

Measures the cash generated from a company's normal business operations, indicating whether a company can maintain or grow its operations without new financing.

Net Working Capital

The difference between a company's current assets (like cash, inventory, receivables) and its current liabilities (like payables), indicating short-term financial health and operational efficiency.

Cash Flow From Assets

The total amount of money being transferred in and out of a business, particularly from operational, investing, and financing activities.

Shareholders' Equity

The ownership interest of shareholders in a company's assets, once all liabilities have been subtracted.