Is Expenditure on construction of a house included/excluded in national income?
Is Expenditure on construction of a house included/excluded in national income?
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Yes,
Expenditure on construction of a house will be included in the national income as it is a part of capital formation.
Explanation:-
Expenditure on the construction of a house is part of gross fixed capital formation.
It is the addition of the current stock of capital during a year. It is called gross domestic capital formation.
Domestic capital formation is added to the national income through the Expenditure Method.
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