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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
(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.
(b) Not included as it is a transfer payment.
(c) Included as the expenditure is done within the domestic territory.
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