Which GDP approach adds up wages, rent, interest, and profits?
Answer (1)
This is the income approach. It totals all the earnings from producing goods and services, including workers’ wages, landlords’ rent, bankers’ interest, and business profits. For instance, in a bakery, the salaries of bakers, rent paid for the space, and profits earned by the owner are all part of the income approach to GDP. This method helps economists understand how income is distributed among people in the economy.
