Income method measures national income generated from four factors of production i.e. land, labour, capital and entrepreneurship. Which of the following options link with the income method of calculating national income?
Answer & explanation
Correct answer: option 1
The correct answer is option 1: Income is generated in the form of rent, wages, interest and profits
The Income Method of calculating National Income measures the total income earned by the four factors of production:
- Land → Rent
- Labour → Wages & Salaries
- Capital → Interest
- Entrepreneurship → Profits