GDP gets distributed among the people of a country as incomes, except for:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → retained earnings
GDP is shared out among people as wages, rent, interest and profits. The part firms keep, retained earnings, is not paid out to anyone.
NCERT (2026-27): “2.5 GDP and Welfare … GDP is the sum total of value of goods and services created within the geographical boundary of a country in a particular year. It gets distributed among the people as incomes (except for retained earnings). So we may be tempted to treat higher level of GDP of a country as an index of greater well-being of the people of that country (to account for price changes, we may take the value of real GDP instead of nominal GDP). …” |