Question

Which of the following is not included in expenditure method of calculating national income?

• A. Net exports
• B. Private final consumption expenditure
• C. Government final consumption expenditure
• D. Expenditure on second hand goods

Answer 1

Answer: (D)

Expenditure on second hand goods

Expenditure method: national income is measured as a flow of expenditure. Includes sum total of private consumption expenditure. Government consumption expenditure, gross capital formation (Government and private) and net exports (Export-Import).

It does not include expenditure on second hand goods.