Question

All of the following are correct except

A. Gross domestic income = Wages + Interest + Profits + Rent .
B. Gross domestic income is GDP calculated as the sum of income payments to households.
C. Gross domestic income includes sales tax, depreciation and other items.
D. Gross domestic income does not include health insurance benefits received by the
employees.
Which component of gross domestic income is the largest?
A. wages
B. interest
C. profits
D. rent

Answer 1

The incorrect statement regarding components of gross domestic income (GDI) is that it includes sales tax and depreciation. The largest component of GDI is generally wages since they make up the most significant proportion of income that households receive.

The correct opiton is C and A.

Step-by-step explanation:

The student question revolves around which component of gross domestic income (GDI) is the largest. GDI components include wages, interest, profits, and rent. Statement C, which says that Gross domestic income includes sales tax, depreciation and other items, is incorrect since GDI is primarily concerned with income payments to households and not sales taxes or depreciation.

To address the second part of the question, the largest component of GDI is typically wages. This is because wages represent the sum of all compensation that employees receive for their labor, which generally constitutes the largest part of income received by households.

The correct opiton is C and A.