Question

How should the following be treated in estimating national income of a country ? You must give reason for your answer.
(i) Taking care of aged parents
(ii) Payment of corporate tax.
(iii) Expenditure on providing police services by the government

Answer 1

$iTakingcareofagedparents$: This will not be included in the national income, as it does not involve any production of good and services. Moreover, these services that are meant for self consumption and it is difficult to estimate the market value of such services.

$iiPaymentofcorporatetax$: Corporate tax is a part of corporate profit and therefore, it is included in national income of the country.

$iiiExpenditureonprovidingpoliceservicesbythegovernment$: It is included in the national income of a country as it forms a part of government final consumption expenditure.