(i) Interest paid by Banks-It will be included as it is a factor income.
(ii) National Debt Interest-It will not be included as it is assumed that Government borrows for consumption Purpose. Therefore, it is treated as transfer income.
(d) Narrow money is the most liquid part of the money supply because the demand deposits can be withdrawn anytime during the banking hours. Time deposits on the other hand...
(d) Currency/cash is the most liquid, then the demand deposits (current accounts), then the saving deposits with bank and finally the least liquid is the time deposits with the bank...
Reasons :
(i) Expenditure on Fertilizers-It is intermediate cost for the farmer and deducted from the value of output while arriving at National income, Therefore, not included.
(ii) Purchase of Tractor-lt is included...
Reasons:
(i) Payment of Bonus- It will be included in national income as it is a part of the compensation of employees.
(ii) Payment of Interest-lt will not be included in the national...
Reasons:
(i) Expenditure on the education of children by a family is included in national income since it is a part of Private Final Consumption Expenditure.
(ii) Payment of electricity bill by...
Reasons:
(i) Payment of excise duty only increases the market value of final goods and services. Therefore, this is not included in the estimation of national income.
(ii) Payment of interest by...
Reasons :
(i) Free medical facilities by the employer are included in the estimation of national income because it is a kind of wages in kind and therefore, a part of...
(i) Fee to a mechanic paid by a firm is intermediate consumption expenditure of a firm. Since the inclusion of intermediate consumption expenditure leads to double counting, it will not...
Reasons:
(i) Bonus - It should be included because it is compensation paid to employees.
(ii) Addition to stock - It should also be included because it is an investment, a final...
Reason:
(i) Included in National Income because it results in inflows of income through productive activities.
(ii) It is not included in the national income because it is a transfer payment.
(iii) It...
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