Which of the following is true?
a) Income method is calculated based on aggregate of Interest, wage, EBIT and rent income.
b) GVA at basic prices + Net product taxes = GVAMP
Answer & explanation
Correct answer: option 3
The correct answer is Option 4: b is true, a is not
Statement a) is incorrect. The income method for calculating national income is based on summing up compensation of employees, profits of businesses (NOT EBIT), net rental income of landlords, and net interest income. EBIT (Earnings Before Interest and Taxes) is an intermediate calculation used in financial accounting, not directly in the income method for national income.
Statement b) GVA at basic prices + Net product taxes = GVAMP : This is correct.
GVA at basic prices = GVAMP - Net product taxes