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