Which of the following transactions is not included in National Income?
Which of the following transactions is not included in National Income?
(a) Brokerage paid on sale of second hand goods
(b) Payment of Corporation Tax
(c) Interest on finance provided by owners of production units
(d) Royalty
Anurag Pathak Changed status to publish December 14, 2023
Ans – (b)
Explanation:-
Corporation tax is already included in the profit. Adding it separately to the national income would result in double counting.
National Income = Compensation of Employees + Mixed Income + Rent (Royalty) + Interest + Profits (Corporate tax + Dividend + retained earnings) + Net factor income from abroad.
(a)
Brokerage paid on sale of second and goods is the factor income and included in the national income
(c)
Interest on finance provided by owners of production units is included in the national income as the loan is used for productive services.
(d)
Royalty is the factor income and is added to the national income through the Income Method.
Anurag Pathak Changed status to publish December 14, 2023
