How are following treated in the estimation of national income ? Payme – InterviewSolution

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1.	How are following treated in the estimation of national income ? Payment for cloth by a garment manufacturing firm.
Answer» It is an intermediate expenditure for the firm because it involves purchase of goods by one production unit (firm) from another production unit. So, it is deducted from the value of output of the firm to arrive at the value added. So, it is not included in national income.

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