CBSE 2014 Class 12 Economics Outside Delhi Set-1

© examsnet.com
Question : 17
Total: 19
How should the following be treated in estimating national income of a country? You must give reasons for your answer.
(i) Taking care of aged parents
(ii) Payment of corporate tax
(iii) Expenditure on providing police services by the government
Solution:  
(i) Taking care of aged parents : This will not be included in national income as it does not involve any production of goods and services. Moreover, these services that are meant for self-consumption and it is difficult to estimate the market value of such services.
(ii) Payment of corporate tax : Corporate tax is a part of corporate profit and therefore, it is included in national income of the country.
(iii) Expenditure on providing police services by the government : It is included in national income of a country as it forms a part of Government Final Consumption Expenditure.
© examsnet.com
Go to Question: