National Income = C (household consumption) + G(____________) + I (investment expense) + NX (net exports).
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. government expenditure
The total national income is equal to the total expenditure in the economy, considering consumption, government spending, investment, and net exports. Here's a brief explanation of each component:
- C (Household Consumption): This represents the total expenditure by households on goods and services during a specific period.
- G (Government Expenditure): This includes all government spending on goods and services. It covers items such as defense, education, healthcare, and infrastructure.
- I (Investment Expense): This refers to the total investment made by businesses in the economy.
- NX (Net Exports): Net exports represent the difference between a country's exports (goods and services sold to other countries) and its imports (goods and services purchased from other countries).