Question

Under the Expenditure Method, national income is estimated by adding:

Options

• All intermediate expenditures incurred during a year

• All factor incomes earned during a year

• All final expenditures incurred in the economy during a year

• Only government expenditures during a year

Answer 1

The method adds all final expenditures incurred in the economy during a year. Intermediate expenditures are not included because their value is already reflected in final goods and services.