Is payment of interest on a loan taken by an employee from the employer included/excluded in national income?
Is payment of interest on a loan taken by an employee from the employer included/excluded in national income?
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No,
The payment of interest on a loan taken by an employee from the employer will not be included in the national income because it is a non-factor receipt as the loan is not used for production but for consumption.
Explanation:-
Interest received on loans taken for consumption purposes does not add to the current flow of goods and services.
Thus it will not be added to the national income.
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