National Debt interest included/excluded in National Income
Determine the following item included/excluded in the National Income
National Debt interest included/excluded in National Income.
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No,
National Debt interest is not included in the national income as it is the interest paid on loans taken by the government to meet its consumption purposes and does not add to the flow of goods.
Explanation:-
National Debt interest is the loan taken by the government from the general public.
It is taken by the government to meet its day-to-day administrative expenses.
Even if the loan is taken by the government for the development of the country’s infrastructure (investment). The government does not guarantee that it would be exactly used for that purpose.
Thus National Debt interest is not included in the national income as it is against the loan for consumption purposes and does not add to the flow of goods..
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