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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
(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.
(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.
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