Is payment of interest by an individual to a bank included/excluded in national income?
Is payment of interest by an individual to a bank included/excluded in national income?
Anurag Pathak Changed status to publish
No,
The payment of interest by an individual to a bank 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.
Anurag Pathak Changed status to publish
