Economics (AS & A Level) · Oct / Nov 2022 · Paper 33 · Question 19

Which statement about National Income accounting is correct when Gross Domestic Product (GDP) is converted into Net National Income (NNI)?

1. AAn allowance for depreciation has to be made, because the NNI does not include output that replaces capital that has been used up.
2. BBoth GDP and NNI have to be calculated by the incomes method, because that is what NNI is measuring.
3. CDouble counting is not a problem if the conversion uses the output method, but it is when using the expenditure method.
4. DThe value of exports needs to be added, because exports generate income for citizens.

As printed in the paper