Question

Total production of final goods and services equals total expenditures. They both equal _____.

total income
government taxes
producer's profits

Answer 1

C) producer's profits

Answer 2

Total production of final goods and services amounts to its total expenditures which are both equal to a producer's profits. The amount of money collected from the goods and services minus the producer's total expenditures refers to his overall profits. This is the basic computation of investments made in business.