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InterviewSolution
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Giving reason explain how should the following be treated in estimation of national income : (i) Expenditure by a firm on payment of fees to a chartered accountant (ii) Payment of corporate tax by a firm (iii) Purchase of refrigerator by a firm for own use |
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Answer» SOLUTION :(a) The services of chartered accountant hired by the firm should not be included in the estimation of national income. This is because it FORMS a part of the firm's intermediate consumption. (b) Payment of corporate tax is not included in the national income as it is a more transfer payment from the firm to the government. It is a part of corporate profits which ALREADY form part of national income, therefore, it should not be separately included in national income (in ADDITION to corporate profits). (c ) PURCHASE of refrigerator by a firm for own use will be included in the national income as it is regarded as final consumption expenditure. |
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