Answer to Question #222894 in Macroeconomics for tayy

Question

Which of the following statement(s) about Gross Domestic Product is incorrect?

i. Compensation of employees (wages) is the single largest component of aggregate income.

ii. Transfer payments buy no goods or services. 

iii. Aggregate income equals aggregate expenditure and both equal GDP.

iv. Investment is the flow that adds to the stock of capital.

v. Gross domestic product includes depreciation. 

Group of answer choices

i, ii, iii and iv only.

i, iii, iv and v only.

ii, iii, iv and v only.

ii only.

Answer 1

Answer

ii. Transfer payments buy no goods or services.