1.

Give an idea about the incomes that are deducted while calculating the national income with production method.

Answer»

Incomes or items that are deducted:

1. Depreciation:

During the process of production the depreciation related to capital factor is deducted from the national product.

2. Indirect tax and subsidy:

  • While deriving the market value of a good, the indirect taxes of the government levied on the goods are added.
  • Hence, while finding out national product, the indirect taxes are deducted whereas the subsidy given by government is added.


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