Question

Which of the following is NOT a part of the income approach to determining GDP? 1....

Which of the following is NOT a part of the income approach to determining GDP?

1. rental income

2. net interest

3. indirect business taxes

4. gross private domestic investment

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Answer #1

Option 1.

  • The income approach to determining GDP, calculates all the income received from the various assets, properties etc.
  • It includes the net interest earned, indirect business taxes, gross private domestic investment etc.
  • While the rental income, depreciation, compensations are not included as these might not occur every time.
  • The rental income does not include the rent earned from all the units. Hence these cannot be included in the income approach.
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