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Income Method

Whether the f...

Question

Whether the following items will be included in National Income?
(i) Purchase of books by a student.
(ii) Bonus to employees.
(iii) interest paid by an individual on loan taken.
(iv) Expenditure on repair of fixed capital asset.
(v) Free medical facilities by the employer.

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Solution

(i) Yes, it is a part of private final consumption expenditure.
(ii) Yes, it is a part of COE (Cost of Expenditure)
(iii) No, as it is a non-factor payment since the loan is not used for production but for consumption.
(iv) No, it is a part of intermediate consumption expenditure.
(v) Yes, it is a part of COE (Cost of Expenditure)

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