Consider the following statements regarding the Income Method of calculating GDP: 1. GDP is the sum of the incomes received by all the factors of production in the economy, such as wages, profits, interest, and rents. 2. The income method is different from the expenditure method as it includes intermediate goods in the calculation of GDP. 3. In the income method, the GDP is the sum of wages, profits, interest, and rents, which are the total incomes earned by households. Which of the statements given above is/are correct? |ForumIAS

[A] 1 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: C

Notes:

Explanation:

GDP, under the income method, is calculated by summing the incomes received by factors of production such as wages, profits, interest, and rents.
The income method does not include intermediate goods in the GDP calculation; it calculates income earned by factors of production from the final goods produced.
In the income method, the GDP is the sum of wages, profits, interest, and rents, which are the total incomes earned by households.

Source- 12th NCERT: Economics: Macroeconomics

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