Answered step by step
Verified Expert Solution
Question
1 Approved Answer
5. An alternative way to calculate the GDP is to compute the value of total income of an economy (known as the income approach). Thus
5. An alternative way to calculate the GDP is to compute the value of total income of an economy (known as the income approach). Thus the formula would be: GDP - wages + interest + rear + profit Suppose an owner of a rm hires his son as a manager and pays him $X a month. But his son is unproductive at all. Now the owner claims that despite the fact that the rm's output remains unchanged, GDP would still increase by $X by the income approach. Is his argument true or false? Explain
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started