It must be noted that any expenditure on repairs of fixed assets will not be included in national income. 28. Write any two differences between GDP at constant price and GDP at current prices. Yes, it will be included in the national income as it is a part of capital formation. Expenditure by government in providing free education. Another way to prevent getting this page in the future is to use Privacy Pass. C) transfer payments. No, it will not be included in the national income as it is an indirect tax paid by the firm. Contribution to provident fund by employees. They are subtracted from the domestic income to get the national income. Which of the following is not included in the National Income ? No, it will not be included in the national income as it is a transfer receipt. An increase in inventories will increase which component of gross domestic product? 900. Given real income to be 400 and price index be 100, calculate nominal income. Expenditure on Intermediate Goods will not be included in the national income as it is already included in the value of final expenditure. Which of the following is not included in National Income Accounts? 90. 8. net factor income from abroad -10. See the answer. Step 2 – Infrastructure, capital … Some of the major items whether included or excluded in national income are as follows: 1. Salaries received by Indian residents working in Russian Embassy in India. Explain the precautions that should be taken while estimating national income by value added method. B. 21. • Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. 58. 46. Crookedlettaman. Ans. Yes, it will be included in the national income as people living in such houses enjoy housing services similar to those in rented houses. 29. Interest paid by banks on deposits by individuals. Copyright 10. Before publishing your articles on this site, please read the following pages: 1. 6. net domestic capital formation . 30. Economic Growth Concentrates On Understanding The Determinants Of A. Commission on sale of second-hand goods. No, it will not be included in the national income as it is difficult to determine the value of services provided by family members to each other. On the other hand, retirement pension is included in national income as it is a part of COE. Payment of interest on a loan taken by an employee from the employer. 33. 61. Yes, it will be included in the national income as it is the income of a middleman for his productive services to various parties. Yes, it will be included in the national income as it is a part of capital formation and leads to production of goods and services in the economy. 50. The Rate Of Price Changes. 50. It’s is taking into national income, it just depend on the approach you’re using, if you’re using an income approach (reward of factors of production) in getting your GDP, then all income at personal (reward for labour= wages and salaries), firm(interest, profit, dividend and undistributed profit) and govt level (this will be gotten when you get you calculate for your … Expenditure on advertisement by a firm. 65. Privacy Policy 8. Add your answer and earn points. You may need to download version 2.0 now from the Chrome Web Store. The Expenditure Method. Which of the following is included in the GDP but not in national income? Which Of The Following Are Not Included In The Expenditure Approach To National Income Accounting? Yes, it is included in the national income as it is an income received for productive services. Insurance money received from Oriental Insurance due to destruction of factory due to fire. A short-run increase in national income could be caused by a decrease in which of the following? Thus, the national income of a country, at factor cost, is equivalent to the sum total of the disbursements of their (factors) income. Test bank Questions and Answers of Chapter 20: The Measurement of National Income Which of the following will be included in the calculation of GDP using the income-based method? Expenditure on the purchase of shares of a new company. When the income tax by a firm refers to corporate tax, it is a transfer payment made by the firm to the government. Your IP: 128.199.112.78 Similarly, items included under other heads do not enter the sum of Gross National Product. 54. 14. The following points highlight the three methods for measuring national income. 3. net export -25. Rent received by Indian residents on their buildings rented out to foreigners in India. 68. Yes, it is included in the national income as it is a part of the private final consumption expenditure. 2006}. So, it is deducted from the value of output of the firm to arrive at the value added. 56. Dividend received by a foreigner from investment in shares of an Indian company. Banking Awareness multiple choice questions and answers e.g. {CBSE, All India Comptt. Commission received by a dealer from the buyer and seller of a house. Taxes C. Social Security D. Changes In The Stock Exchange E. All Of The Above 2. Money received by a family in India from relatives working abroad. Yes, it will be included in the national income as such interest received is a factor income because debenture is a sort of loan taken by a production unit. i. Yes, it will be included in the national income as it is a part of the compensation to employees. Expert Answer 100% (1 rating) Ans- 5. 19. Scholarship given to Indian students studying in India by a foreign company. Value of bonus shares received by shareholders of a company. the state pension; income support for families on low incomes… It is a part of National wealth and is not included in national income. ☂ Expenditure on fertilizers by a farmer. A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product, gross national product, net national income, and adjusted national income. Family members working free on farm owned by family. Milk purchased by a Sweet shop to make milk-cake. No, it will not be included in the national income because receipts from the sale of second­hand goods are by virtue of transfer of an already existing object. Expenditure on free services provided by government. ii. No, such goods will not be including ‘ in national income as goods lying within the production boundary are intermediate goods. Purchase of second-hand goods will … No, it will not be included in the national income as it is a transfer payment made by the government and a transfer income for the receiver. No, it is not included in the national income as it is a part of the factor income paid abroad. 100. No, it will not be included in the national income as it is a transfer payment. National income as gifts received are transfer incomes. 59. 5. private final consumption expenditure . … (c) Salaries of Indians working in the American Embassy in India: Indian Economy - National Income - MCQs with answers - Part 2 1. Payment of interest by a government firm. Give reasons for your answer. Salaries paid to Russians working in Indian Embassy in Russia. Payment of interest by bank to an individual is again a factor payment, therefore included in national income. 57. No, it will not be included in the national income because it is a non-factor receipt as the loan is not used for production but for consumption. 1) Imputed rent of owneroccupied houses 2) Government expenditure on making new bridges 3) Winning a lottery 4) Commission paid to an agent for sale of house: 682: 18 Previous Next Subsidized lunch served to workers in a factory. Favorite Answer. Q.23. ( 6 marks) (ii) (iii) Profits earned by an Indian bank from its branches abroad. Expenditure on maintenance of building. 40. Purchase of raw materials by a production unit. It will be included in national income as these free services are part of compensation to employees. Content Guidelines 2. ☑ Answer - Services of housewives. Which of the following … Old age pension is not included in national income as it is a transfer payment. Growing vegetables in a kitchen garden of the house. Value of wood purchased for manufacturing a table. Yes, it is a part of the compensation of employees and, therefore, it will be included in the national income. Rent-free house given to an employee by an employer. Report a Violation, Treatment of Different Items in Domestic Income, Measuring National Income (NI): Top 4 Methods, Value Added Method for Measurement of National Income. Construction of a new house. Investment in the GDP equation is gross … No, it will not be included in the national income as it is a part of the intermediate consumption expenditure. A) consumption of fixed capital. Contribution to provident fund by the employers is a payment made by the employers on behalf of the employees and it is included … 35. 21. ... Only those incomes that come from the production of goods and services are included in the calculation of GDP by the income approach. 32. Step by Step Calculation Methods of National Income. 31. Old age pension must not be confused with retirement pension. 45. No, it will not be included in national income as petrol is an intermediate good in this case. Yes, it will be included in the national income as it is a mixed income. {CBSE, Delhi 2010} Yes, it will be included in the national income as it is factor income from abroad. Yes, it will be included in the national income as it is a part of the government final consumption expenditure. Payment of electricity bill by a school. No. Interest received on loans given to a friend for purchasing a car. 66. 25. Dividend received by an Indian from his investment in shares of a foreign company. No, it will not be included in the national income as receipt from sale of such property is by virtue of transfer of an already existing object. We exclude: Transfer payments e.g. Services rendered by family members to each other. It is a factor payment by a producer. 60. National income measures the monetary value of the flow of output of goods and services produced in an economy over a period of time. 2) Profits earned by an Indian bank from its branches abroad. 69. Yes, it will be included in the national income as it is a part of gross domestic capital formation. B) corporate dividends. No, it will not be included in the national income as it is a part of intermediate consumption expenditure. Goods lying within the production boundary. Therefore, imputed value of laptops should be included. Payment of interest by a firm to a bank is an interest income (factor income) therefore added in national income. 73. Purchase of a truck to carry goods by a production unit. D) personal income taxes. 9. Payment of fees to a lawyer engaged by a firm. If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. TOS 7. If it is included again, it will lead to double counting of expenditures. (iv) Interest received by an individual from banks. Purchase of rented factory building by the factory owner. 8. 12. Yes, it is included in the national income as it adds to current flow of goods and services. Proprietors' Income Net Interest Receipts Of Factor Income From The Rest Of The World. Yes, it is included in the National income of India because it is a part of Expenditure on improvement of fixed capital asset. S.NO ITEMS (IN CRORES) 1. Entertainment tax received by the government. On this basis, national income has been defined in a number of ways. ⚛ Question - In calculating national income which of the following is included? 3. Imputed rent of self occupied houses. Direct purchase made abroad by government. Money received by government from sale of a public sector firm to a private owner. It constitutes a part of income, and hence it will not be taken into account individually in the estimation of national income. In common parlance, national income means the total value of goods and services produced annually in a country. Which of the following will be included while calculating national income..... 1 See answer vindadevi21569 is waiting for your help. No, capital gains will not be included in the national income as they do not add to the current flow of goods and services in the economy. Relevance. No, it will not be included in the national income as it is intermediate cost for the school and deducted from value of output while arriving at national income. 16. Purchase of equipment’s for installation in a factory. Thus, National Income is equal to the factor incomes minus transfer payments. No, it will not be included in the national income as it is intermediate cost for the farmer and deducted from value of output while arriving at national income. However, for an individual economic transaction to be included in aggregate national income it must involve the purchase of newly produced goods or services. Value of interest foregone on loans provided by employer to employee. Wheat grown by a farmer but used entirely for family’s consumption. Computation of National Income: National Income = Private final consumption expenditure + Government final consumption expenditure + (Net domestic fixed capital formation + depreciation + change in stock) - net imports - depreciation - Net Indirect Taxes - Net factor income to abroad National income = 600 + 100 + (70 + 14 - 10) - 20 - 14 - 60 – 10 It is used for the provision of the final product (maintenance of law and order by the police). Yes, it will be included in the national income as it is a part of the private final consumption expenditure. … A)yes because national income are theNNP at factor cost and while calculating NNP we need to calculate GNP which again includes export earning,so indian company earning abroad are termed as export earning so they are incuded in calculation of national income of the country concerned.but it will not included in domestic income because the indian company are … 500. (i) Financial help given to flood victims. 64. i. 7 Compensation of employees . 53. Performance & security by Cloudflare, Please complete the security check to access. Image Guidelines 5. Yes, purchases by foreign tourists are ‘exports’ and, therefore, they are included in the national income through the Expenditure Method. No, it will not be included in the national income as it is merely a transfer payment. • National income is an uncertain term which is used interchangeably with national dividend, national output and national expenditure. 2. net indirect taxes . A) Gross means before deductions. Free medical facilities by the employer. 27. ii. No, it is not included in the national income as it is a part of factor income paid abroad. Expenditure on the purchase of an old house. Purchase of a machine by a factory. 9. Earning from a part time job in McDonalds by a student. Payment of interest by an individual to bank is interest (factors income), therefore it is included in national income. The income at their disposal after paying direct taxes is called disposable income a. I only b. ii only c. both d. none View Answer / Hide Answer Lv 4. 22. Receipt from sale of property, inherited from a relative. (iii) Increase in stock of consumer goods with households. Contribution to provident fund by employer. Expenditure by the Government on scholarships to students. Increase in the prices of stocks lying with a trader. (i) Imputed salaries of these members will be included in national income. (iv) Bus fare paid by a passenger. Transfer Payments are not included as such payments are not connected with any productive activity and there is no value addition. No, it will not be included in the national income as such bonus shares are mere paper claims and do not contribute to the production of goods and services. Yes, it is included in the national income by Income Method since it is a part of ‘wages in kind’ paid to employees. Interest received on loan given to a foreign company in India. No, it will not be included in the national income as it is a transfer income. Profits earned by an Indian bank from its branches abroad. 52. Give reason for your 1) Salaries paid to non resident Indians working in Indian Embassy in America. The methods are: 1. In an economy following transactions took place. The Short-term Change In Per Capita … For an economy consisting of households and businesses only, which of the following is consistent with the circular flow of income and production? Therefore, its imputed value should be included. 44. No, it is not included in the national income because it is a transfer receipt. Entertainment allowance to an employee for entertaining business guests. The symbolic expression of this method is as follows: National income accounting refers to the bookkeeping system that governments use to measure the level of the economic activity such as GDP. 1. 24. Find National income from the following using EXPENDITURE method. Money received from sale of second-hand goods. 5. The Income Method 3. 2. The Product (Output) Method 2. Yes, it will be included in the national income as it is a part of the capital formation or investment by the farmer. 48. Bonus paid to a worker. 47. • 2 Answers. Yes, it will be included in the national income as it is a pan of factor income from abroad. No, it is not included in the national income because such contribution is made by the employees from compensation of employees only. - This objective type question with answer for competitive exams is provided by Gkseries. Profits of Reliance Industries from its chemicals business in Australia. It is subtracted from domestic income to get national income. 26. HP uses its own new Laptops in its office for self-consumption. Destruction of building due to an earthquake. All are specially concerned with counting the total amount of goods and services produced within the economy and by various … Content Filtrations 6. Yes, they will be included in the national income as they are a part of the factor income from abroad. Yes. Durable goods purchased by a household. Harish works in USA and sends money to his family in India. 75. Financial help received by flood victims. 79. 62. 15. No, it will not be included in the national income as it is a financial claim and does not contribute to any productive activity. However, that part of mineral wealth which has been extracted during the current year will be included in national income under the product method. This method is also called the Factor Cost Method. 13. 3. Give reasons for your answer. Salaries paid to non-resident Indians working in Indian Embassy in America. 10. Net National Product (NNP) is GNP minus depreciation Net National Income (NNI) is NNP minus indirect taxes Personal Income (PI) is … 34. National output, income and expenditure, are generated when there is an exchange involving a monetary transaction. 1 decade ago. Imports. Will the following be included in national income 1)interest recieved on debentures 2)Dividend recieved by an indian from his investment in shares of foreign company 3)Expenditure on maintenance of a building 4 Expenditure on adding a floor to building 5 Salaries paid to non-resident indian working in indian - Economics - National Income Accounting Expenditure by father on marriage of his daughter. Show transcribed image text. This problem has been solved! No, this will not be included in the national income as it is a transfer income. Yes, it will be included in the national income as royalty is a productive income. No, it will not be included in national income because it is a non-factor payment as general government borrows only for consumption purpose. Which of the following income will not be included in national income calculation. Giving reasons, explain the treatment assigned to the following while estimating national income: Personal income refers to the income of individuals of a country. Answer options - Income of a joker in a circus company, Income of a commercial artist, Commission income of a share broker, Individual's income from sale of shares Will the following be included in National Income of India? Earnings of shareholders from the sale of shares. If you add the net income earned from abroad in this total sum then the national income is created. (i) Payment of electricity bill by a factory. 36. Disclaimer 9. Yes, it will be included in the national income as it is a part of the factor income from abroad. Expenditures on the purchase of cold drinks by a school canteen from the manufacturer. (c)Receipts of factor income … Earnings of a self-employed doctor having a clinic at his own residence. (v) Gains from sale of shares. Please enable Cookies and reload the page. 43. No, it is not included in the national income as it is the interest paid on loans taken by government to meet its consumption purposes. Yes, it will be included in the national income as it is a part of the capital formation or investment by the firm. Capital gains to Indian residents from sale of shares of a foreign company. Cloudflare Ray ID: 625fca974b3018b0 ☀ Click for more questions. Some of the major items whether included or excluded in national income are as follows: Yes, it will be included in the national income as it is a part of capital formation and leads to production of goods and services in the economy. Because it is part of factor income to Abroad. Yes, it will be included in national income as it is a part of factor income from abroad. Expenditure on the construction of a flyover by the government. A worker's retirement benefits. Firm incurred expenditure on medical treatment of employee’s family. No, it will not be included in the national income as it will not affect national product directly. No, it will not be included in the national income as it is difficult to estimate the value of production (It is a non-market transaction). Yes, it will be included in the national income as it is the income of the dealer for his productive services. Payment of interest on borrowings by general government. 6. Which of the following will be included in the income-based method of national accounting? 49. 55. Profit earned by foreign banks in India. Yes, it will be included in the national income as such interest is paid on loan taken for productive purpose. Click hereto get an answer to your question ️ Whether the following items will be included in National Income? 4. rent . Which of the following is not included in the estimates of National Income? 39. Food purchased by a foreign tourist at a hotel in New Delhi. Consider the following statements and identify the right ones. Adding value. (b) Profits earned by the branches of a foreign bank in India: No, the profits will not be a part of the national income of India. National Income: Wages+Fines+Interest+Dividend+Profit+ Corporate Profit Tax +Public Sector Surplus+ Net Income Earned from Abroad +Mixed Income. Try out this 7-minute short Multiple Choice questions test on the items and heads included in or excluded from National Income. No, it will not be included in the national income as it does not add to current flow of goods and services. Yes, it will be included in the national income as it is a part of the gross domestic capital formation. A health insurance provided to a worker by the employer. 200. A. Free boarding and lodging provided to a domestic servant. Yes, Imputed salaries of these members will be included in national income. The sum is called national income. Interest payment on loan taken by an individual to buy a motor cycle. So, it is not separately included in the estimation of national income. So, it is not included in national income. No, it will not be included in the national income as it does not amount to any flow of goods. It is subtracted from domestic income to get national income. Expenditures on adding a floor to the building. No, it will not be included in the national income as it is a compulsory transfer payment to the government. 70. Yes, it is included in the national income because it adds to the current flow of goods and services. No, it will not be included in the national income as it does not add to the flow of goods and services in the economy. Investment expenditures. Step 1 – The first part is the consumption that needs to be identified and computed and that is nothing, but total expenditure incurred by the country’s government in the procurement of goods and services. 42. 17. No, it will not be included in the national income as it is intermediate consumption expenditure of the business. Expenditure on education of children by a family. It is an intermediate expenditure for the firm because it involves purchase of services by one production unit (firm) from another production unit (lawyer). 18. There are certain items included while computing National Income, but excluded from the related concepts of National Income. 51. The following are the methods to calculate national income using its formula. Which of the following is an example of labor income? (ii) It will not be included in national income because it is a non-factor payment as general government borrows only for consumption purpose. Transfer Payments B. 76. (ii) Dividend on shares. Prohibited Content 3. Will the following be included in the National Income of India ?