Question

Total production of final goods and services equals total expenditures. What are they both equal to?

A. total income
B. government taxes
C. producer's profits

Answer 1

Answer: Option 'c' is correct.

Step-by-step explanation:

Since total production of final goods and services equals total expenditure.

As we know that

Increase in production leads to increase in producer's profit.

And if we increase the expenditure on production, it again leads to increase in producer's profit.

So, Total production of final goods and services and total expenditure equals to producer's profits.

Hence, Option 'c' is correct.

Answer 2

The total production of final goods and services equals to total expenditures. Both are equal to producers profits. The producers profits is the money collected from goods & services and minus the total expenditures. The correct answer is C.