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In an economy, when comparing (1) total value added, (2) total expenditure on final goods, and (3) total factor income, what relationship holds true among these three measures?

The National Economy MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
The National Economyeconomics-mcqs › the-national-economy
Published
27 May 2019
Last updated
28 May 2026

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Explanation

In national accounting, total value added, total spending on final goods, and total factor income represent the same economic output measured from different perspectives. Therefore, these three quantities are equal in value.

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Practice related questions from the same subject.

  1. 1.How does leakage through imports in an open economy affect the multiplier's magnitude?
  2. 2.Which components determine the overall multiplier effect in an economy?
  3. 3.With fixed government expenditure and tax rates, during which economic phases does the government budget deficit increase and during which does it decrease?
  4. 4.What is the likely effect on economic output if the government raises taxes to fully cover an increase in its spending?
  5. 5.When households attempt to increase their savings, but equilibrium income shifts without any change in total savings, what economic concept does this illustrate?
  6. 6.How is the multiplier determined in economic terms?
  7. 7.If investment is considered autonomous, what factor primarily determines the slope of the aggregate demand (AD) curve?
  8. 8.In the short-run equilibrium, how does aggregate demand relate to the actual level of output?
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