1.

List out the incomes/items that are considered, not considered or deducted while calculating national income through income method.

Answer»

Types of incomes and their role while calculating national income:

(I) Incomes that are considered:

  1. Income earned from factors of production namely,
    (A) Income of rent,
    (B) Income of interest,
    (C) Income of wages and
    (D) Income of profit.
  2. Net foreign income i.e. income through export-import.
  3. Income generated as commission or brokerage on sale of consumable goods.
  4. Incomes which show flow of production of goods or services in economy which increase the monetary value of goods of the economy.

(II) Incomes that are not considered:

  • Income generated from gifts, rewards, prizes, tips, thefts, unemployment allowances, government assistance to elders, lotteries, etc.
  • The income of the second hand goods.

(III) Incomes that are deducted:

Subsidy given by the government.


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