2.2.3 - Income Method
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Practice Questions
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What are the main components of the income method?
💡 Hint: Think about the payments made to factors of production.
How is GDP calculated using the income method?
💡 Hint: Consider how each component contributes to the total.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does the income method primarily calculate?
💡 Hint: Think about what 'income' encompasses.
True or False: The income method accounts for all economic activities, including informal sectors.
💡 Hint: Consider what counts in formal GDP measures.
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Challenge Problems
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If a country generates wages of $600 billion, profits of $400 billion, interest of $50 billion, and rent of $30 billion in a year, calculate its GDP using the income method. Discuss potential implications of this income distribution.
💡 Hint: Use the given income formula.
Critique the income method based on the limitations in reflecting real economic activities. What additional factors could be considered for a comprehensive GDP estimation?
💡 Hint: Consider sectors outside formal economies.
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