Explain any three precautions which should be taken while estimating n

1.	Explain any three precautions which should be taken while estimating national income by income method.
Answer» (i) Only factor incomes which are earned by rendering productive services are included. All types of transfer income are excluded. (ii) Sale and purchase of secondhand goods are excluded since they are not part of the production of the current year. Likewise, sale proceeds of shares and bonds are not included. (iii) Imputed rent of owners occupied dwellings and value of production for self consumption are included but the value of self-consumed services is not included.

Explain any three precautions which should be taken while estimating national income by income method.

Answer»

(i) Only factor incomes which are earned by rendering productive services are included. All types of transfer income are excluded.

(ii) Sale and purchase of secondhand goods are excluded since they are not part of the production of the current year. Likewise, sale proceeds of shares and bonds are not included.

(iii) Imputed rent of owners occupied dwellings and value of production for self consumption are included but the value of self-consumed services is not included.

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Explain any three precautions which should be taken while estimating national income by income method.

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