Statement 1: In National Income Accounts, interest income includes interest on loans taken for both productive as well as consumption purpose
Statement 1: In National Income Accounts, interest income includes interest on loans taken for both productive as well as consumption purpose.
Statement 2: Interest income includes only the actual interest and not the imputed interest of funds provided by the entrepreneur.
Alternatives:
(a) Both the Statements are true
(b) Both the Statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false
Anurag Pathak Changed status to publish December 10, 2023
Ans – (b)
Explanation:-
Statement 1 is false
National Income accounts only interest income on loans taken for productive purposes as it adds to the current flow of goods and services.
Statement 2 is false
Interest income includes both actual interest and imputed interest of funds provided by the entrepreneur.
Imputed interest is interest that a lender is assumed to have received and must report as income on their taxes regardless of whether they received it.
It applies to family loans and other personal and business loans extended at no interest or an interest rate the IRS considers to be too low
Anurag Pathak Changed status to publish December 10, 2023
