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Why are income, output and expenditure studied together in national income accounting?

Answer and explanation

Correct answer: Because they show total economic activity from different viewpoints

In national income accounting, the value of production creates income for factors of production, and that income supports expenditure on final goods and services. Therefore, output, income and expenditure are three perspectives on the same circular flow of economic activity. With proper adjustments, their measured totals should be equal.

Related tags

National-Income-AccountingIncome-Output-ExpenditureCircular-FlowGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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