How should the following be treated in estimating national income of a country ? You must give reasons for Your answer.

(a) Profit earned by branches of a country's bank in other countries: The profits earned by the branches of a country's banks will not be included in the domestic income...

(i) It is factor income to abroad, so it is not included. (ii) It is included as factor income from abroad.

(i) Bank is a production unit so this is a factor income and hence should be included. (ii) It is a part of the profits of production units which is distributed to the...

 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) 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...

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) Festival gift from an employer is not included in the estimation of national income because this is a transfer payment.  (ii) Rent free house from an employer is included...

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...