Question

Which of the following is not included in the sum of national income? rev: 04_09_2018 Multiple Choice Depreciation or consumption of fixed capital Profits and losses Rent Interest

Answer 1

Answer: Depreciation or consumption of fixed capital

Explanation:

The National Income is the total income earned in a country in a given period thereby making it the GDP because it is assumed that all income in the economy is spent on the expenditures in the same economy.

When calculating the National Income, the depreciation or consumption of fixed capital is not included. Included rather are things like; Rent, Profits/losses, Wages and Pensions.