Milk purchased by a Sweet shop to make milk-cake. Imputed rent of self occupied houses. Services rendered by family members to each other. Proprietors' Income Net Interest Receipts Of Factor Income From The Rest Of The World. Give reason for your 1) Salaries paid to non resident Indians working in Indian Embassy in America. Ans. Will the following be included in the National Income of India ? 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 Financial help received by flood victims. Entertainment tax received by the government. 69. Click hereto get an answer to your question ️ Whether the following items will be included in National Income? 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). (ii) It will not be included in national income because it is a non-factor payment as general government borrows only for consumption purpose. Payment of interest on a loan taken by an employee from the employer. No, it will not be included in the national income as it is a transfer receipt. This problem has been solved! It will be included in national income as these free services are part of compensation to employees. No, it will not be included in the national income as it does not amount to any flow of goods. It must be noted that any expenditure on repairs of fixed assets will not be included in national income. 56. Dividend received by a foreigner from investment in shares of an Indian company. If it is included again, it will lead to double counting of expenditures. 200. National income accounting refers to the bookkeeping system that governments use to measure the level of the economic activity such as GDP. Yes, it will be included in the national income as it is a part of the factor income from abroad. No, it will not be included in the national income as it is merely a transfer payment. Lv 4. Which of the following is not included in National Income Accounts? Yes, it will be included in the national income as it is a mixed income. Crookedlettaman. Thus, the national income of a country, at factor cost, is equivalent to the sum total of the disbursements of their (factors) income. Increase in the prices of stocks lying with a trader. Net National Product (NNP) is GNP minus depreciation Net National Income (NNI) is NNP minus indirect taxes Personal Income (PI) is … Expenditure by father on marriage of his daughter. Profits of Reliance Industries from its chemicals business in Australia. 58. Disclaimer 9. 22. 5. private final consumption expenditure . 66. The sum is called national income. 4. rent . Yes, it will be included in the national income as it is a part of the compensation to employees. No, it will not be included in the national income as it is a transfer income. No, it will not be included in the national income as it is an indirect tax and a compulsory transfer payment received by the government. The following are the methods to calculate national income using its formula. The methods are: 1. However, that part of mineral wealth which has been extracted during the current year will be included in national income under the product method. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. Give reasons for your answer. No, this will not be included in the national income as it is a transfer income. The Rate Of Price Changes. Transfer Payments B. the state pension; income support for families on low incomes… 79. Expenditure on improvement of fixed capital asset. 25. Dividend received by an Indian from his investment in shares of a foreign company. (i) Payment of electricity bill by a factory. No, it is not included in the national income because it is a transfer receipt. Which of the following … Your IP: 128.199.112.78 Food purchased by a foreign tourist at a hotel in New Delhi. Yes, purchases by foreign tourists are ‘exports’ and, therefore, they are included in the national income through the Expenditure Method. Purchase of equipment’s for installation in a factory. 76. 46. 12. See the answer. The Short-term Change In Per Capita … Yes, it will be included in the national income as it is a part of the gross domestic capital formation. • National income is an uncertain term which is used interchangeably with national dividend, national output and national expenditure. Yes, it is included in the National income of India because it is a part of Which of the following will be included while calculating national income..... 1 See answer vindadevi21569 is waiting for your help. There are certain items included while computing National Income, but excluded from the related concepts of National Income. The symbolic expression of this method is as follows: No. Growing vegetables in a kitchen garden of the house. Relevance. Purchase of rented factory building by the factory owner. 36. Yes, it will be included in the national income as it is a part of gross domestic capital formation. Profit earned by foreign banks in India. Bonus paid to a worker. Consider the following statements and identify the right ones. (iii) Increase in stock of consumer goods with households. B) corporate dividends. D) personal income taxes. 48. 42. Which of the following will be included in the calculation of GDP using the income-based method? 14. 9. A health insurance provided to a worker by the employer. No, it will not be included in the national income as it does not add to current flow of goods and services. (ii) Dividend on shares. Expenditure on Intermediate Goods will not be included in the national income as it is already included in the value of final expenditure. The following points highlight the three methods for measuring national income. Therefore, its imputed value should be included. Payment of electricity bill by a school. B. Please enable Cookies and reload the page. Giving reasons, explain the treatment assigned to the following while estimating national income: 500. (iv) Interest received by an individual from banks. Step 2 – Infrastructure, capital … Contribution to provident fund by employer. Adding value. Yes, it will be included in the national income as royalty is a productive income. No, it will not be included in the national income as it is a compulsory transfer payment to the government. Interest paid by banks on deposits by individuals. It is an intermediate expenditure for the firm because it involves purchase of services by one production unit (firm) from another production unit (lawyer). 900. Value of wood purchased for manufacturing a table. 90. Expenditure on the purchase of an old house. 32. National output, income and expenditure, are generated when there is an exchange involving a monetary transaction. Indian Economy - National Income - MCQs with answers - Part 2 1. They are subtracted from the domestic income to get the national income. Wheat grown by a farmer but used entirely for family’s consumption. 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. 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. Interest received on loan given to a foreign company in India. 27. (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. Expenditure on the purchase of shares of a new company. No, it will not be included in the national income as it is a part of intermediate consumption expenditure. 54. Purchase of a machine by a factory. This method is also called the Factor Cost Method. Will the following be included in National Income of India? 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 … 8. … For an economy consisting of households and businesses only, which of the following is consistent with the circular flow of income and production? Yes, it is included in the national income because it adds to the current flow of goods and services. Which of the following is not included in the estimates of National Income? Economic Growth Concentrates On Understanding The Determinants Of A. Content Guidelines 2. 28. Yes, it will be included in the national income as it is a part of the capital formation or investment by the farmer. ⚛ Question - In calculating national income which of the following is included? No, it will not be included in the national income as it is an indirect tax paid by the firm. 34. 24. C) transfer payments. Rent-free house given to an employee by an employer. National income as gifts received are transfer incomes. 57. Expenditure on advertisement by a firm. Yes. 6. net domestic capital formation . Thus, National Income is equal to the factor incomes minus transfer payments. The Income Method 3. 45. 5. 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. Scholarship given to Indian students studying in India by a foreign company. Yes, it is a part of the compensation of employees and, therefore, it will be included in the national income. Salaries received by Indian residents working in Russian Embassy in India. Which of the following will be included in the income-based method of national accounting? 73. (iv) Bus fare paid by a passenger. 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. A) Gross means before deductions. 13. 40. Taxes C. Social Security D. Changes In The Stock Exchange E. All Of The Above 2. 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 … You may need to download version 2.0 now from the Chrome Web Store. 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. 18. ☑ Answer - Services of housewives. 70. 10. 3. 2) Profits earned by an Indian bank from its branches abroad. Which of the following is included in the GDP but not in national income? Which of the following is not included in the National Income ? 51. 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 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. Banking Awareness multiple choice questions and answers e.g. Family members working free on farm owned by family. Earnings of a self-employed doctor having a clinic at his own residence. 7 Compensation of employees . Payment of interest on borrowings by general government. Prohibited Content 3. Before publishing your articles on this site, please read the following pages: 1. Add your answer and earn points. Yes, it will be included in national income as it is a part of factor income from abroad. 26. Investment in the GDP equation is gross … A worker's retirement benefits. Current transfer from rest of the world. Test bank Questions and Answers of Chapter 20: The Measurement of National Income 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. Yes, it will be included in the national income as people living in such houses enjoy housing services similar to those in rented houses. Profits earned by an Indian bank from its branches abroad. 33. 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. 53. 3. Which of the following is an example of labor income? ☂ 44. Answer Save. (i) Financial help given to flood victims. 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. So, it is deducted from the value of output of the firm to arrive at the value added. 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 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. 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. 2 Answers. 16. When the income tax by a firm refers to corporate tax, it is a transfer payment made by the firm to the government. Expenditure by the Government on scholarships to students. On this basis, national income has been defined in a number of ways. - This objective type question with answer for competitive exams is provided by Gkseries. 29. Yes, it will be included in the national income as it is the income of a middleman for his productive services to various parties. ... Only those incomes that come from the production of goods and services are included in the calculation of GDP by the income approach. 49. No, it will not be included in the national income as it is a transfer payment. Yes, it will be included in the national income as it is the income of the dealer for his productive services. ii. 39. Some of the major items whether included or excluded in national income are as follows: 1. Contribution to provident fund by employees. 60. No, it will not be included in national income as petrol is an intermediate good in this case. 6. 43. 1. Privacy Policy 8. {CBSE, All India Comptt. Performance & security by Cloudflare, Please complete the security check to access. Yes, Imputed salaries of these members will be included in national income. Image Guidelines 5. 65. Durable goods purchased by a household. 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. 30. 47. 17. Expenditure on the construction of a flyover by the government. Direct purchase made abroad by government. Therefore, imputed value of laptops should be included. Insurance money received from Oriental Insurance due to destruction of factory due to fire. 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. Q.23. 2. All are specially concerned with counting the total amount of goods and services produced within the economy and by various … Money received by government from sale of a public sector firm to a private owner. Money received by a family in India from relatives working abroad. ii. (v) Gains from sale of shares. Rent received by Indian residents on their buildings rented out to foreigners in India. It is a factor payment by a producer. No, it will not be included in the national income as it is intermediate consumption expenditure of the business. In an economy following transactions took place. Yes, it will be included in the national income as it is a part of the capital formation or investment by the firm. No, it will not be included in the national income as it is a financial claim and does not contribute to any productive activity. In common parlance, national income means the total value of goods and services produced annually in a country. 8. net factor income from abroad -10. Show transcribed image text. Cloudflare Ray ID: 625fca974b3018b0 So, it is not included in national income. (i) Imputed salaries of these members will be included in national income. No, it will not be included in the national income because payment for purchase of secondhand goods is due to transfer of an already existing object. Earning from a part time job in McDonalds by a student. It constitutes a part of income, and hence it will not be taken into account individually in the estimation of national income. No, it is not included in the national income as it is a part of the factor income paid abroad. Purchase of raw materials by a production unit. Entertainment allowance to an employee for entertaining business guests. Yes, they will be included in the national income as they are a part of the factor income from abroad. 50. It is subtracted from domestic income to get national income. Yes, it will be included in the national income as it is a pan of factor income from abroad. Transfer Payments are not included as such payments are not connected with any productive activity and there is no value addition. 59. Purchase of a truck to carry goods by a production unit. On the other hand, retirement pension is included in national income as it is a part of COE. Expenditures on the purchase of cold drinks by a school canteen from the manufacturer. The Product (Output) Method 2. 1 decade ago. No, it will not be included in the national income as it will not affect national product directly. Find National income from the following using EXPENDITURE method. Try out this 7-minute short Multiple Choice questions test on the items and heads included in or excluded from National Income. Copyright 10. ☀ Click for more questions. 15. 55. Old age pension is not included in national income as it is a transfer payment. Value of interest foregone on loans provided by employer to employee. Step by Step Calculation Methods of National Income. Yes, it will be included in the national income as it is a part of the government final consumption expenditure. 61. Similarly, items included under other heads do not enter the sum of Gross National Product. Expenditure on education of children by a family. Old age pension must not be confused with retirement pension. • Plagiarism Prevention 4. Free boarding and lodging provided to a domestic servant. 3. net export -25. 19. 9. The Expenditure Method. 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. No, it is not included in the national income as it is a part of factor income paid abroad. Yes, it is included in the national income as it is a part of the private final consumption expenditure. 68. Goods lying within the production boundary. 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 Free medical facilities by the employer. It is subtracted from domestic income to get national income. We exclude: Transfer payments e.g. Purchase of second-hand goods will … Contribution to provident fund by the employers is a payment made by the employers on behalf of the employees and it is included … 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. Expenditure by government in providing free education. 50. 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. Favorite Answer. S.NO ITEMS (IN CRORES) 1. In other words, it must create a genuine addition to the ‘value’ of the scarce … Given real income to be 400 and price index be 100, calculate nominal 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. 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. 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 No, it is not included in the national income because such contribution is made by the employees from compensation of employees only. Value of bonus shares received by shareholders of a company. Destruction of building due to an earthquake. Interest payment on loan taken by an individual to buy a motor cycle. ( 6 marks) (ii) (iii) Profits earned by an Indian bank from its branches abroad. National income measures the monetary value of the flow of output of goods and services produced in an economy over a period of time. HP uses its own new Laptops in its office for self-consumption. Expenditures on adding a floor to the building. Construction of a new house. Write any two differences between GDP at constant price and GDP at current prices. 64. Yes, it will be included in the national income as it is a part of capital formation. Explain the precautions that should be taken while estimating national income by value added method. Which of the following income will not be included in national income calculation. If you add the net income earned from abroad in this total sum then the national income is created. 21. 2006}. An increase in inventories will increase which component of gross domestic product? (c) Salaries of Indians working in the American Embassy in India: Commission received by a dealer from the buyer and seller of a house. So, it is not separately included in the estimation of national income.
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