CBSE 2017 Class 12 Economics Delhi Set-1

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Question : 16
Total: 18
How will you treat the following while estimating domestic product of a country ? Give reasons for your answer:
(a) Profits earned by branches of country's bank in other countries
(b) Gifts given by an employer to his employees on independence day
(c) Purchase of goods by foreign tourists
Solution:  
(a) Not included in domestic income as it is earned outside the domestic territory of the country.
(b) Not included as it is a transfer payment.
(c) Included as the expenditure is done within the domestic territory.
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