Is Expenditures on the purchase of cold drinks by a school canteen from the manufacturer included/excluded in National Income?
Is Expenditures on the purchase of cold drinks by a school canteen from the manufacturer included/excluded in National Income?
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No,
Expenditure on the purchase of cold drinks by a school canteen will not be included in the national income as it is a part of intermediate consumption expenditure.
Explanation:-
National Income only counts the value of final goods.
The canteen is not the final consumer of the cold drinks purchased.
The cold drinks will be sold to the students and school staff.
The value at which the cold drinks are sold to final consumers (students and school staff) is counted in the national income.
If the expenditure on the purchase of cold drinks by a school canteen is added to the national income, it will lead to double counting.
Thus, the value of it is considered as intermediate consumption and will not be included in the national income.
Anurag Pathak Changed status to publish
