Is payment of interest by a government firm included/excluded in national income?
Is payment of interest by a government firm included/excluded in national income?
Anurag Pathak Changed status to publish December 9, 2023
Yes,
Payment of interest by a government firm will be included in the national income as such interest is paid on loans taken for production purposes. It is a factory payment by a producer.
Explanation:-
In other words, the loan taken by government firm is used for productive purposes.
It adds to the current flow of goods and services in the economy.
Thus interest paid by a government firm will be included in the national income.
Anurag Pathak Changed status to publish December 9, 2023
