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Question : 9
Total: 19
Giving valid reasons, explain how the following would be treated while estimating National income:
(a) Payment of indirect taxes by a firm.
(b) Purchase of goods by foreign tourists.
(a) Payment of indirect taxes by a firm.
(b) Purchase of goods by foreign tourists.
Solution:
(a) Payment of Indirect taxes by a firm: It is not included in national income because it is paid to government and national income includes factor income accrue to factors of production.
(b) Purchase of goods by foreign tourists: It is included in national income because it represents demand of domestically produced goods and national income includes domestic income.
(b) Purchase of goods by foreign tourists: It is included in national income because it represents demand of domestically produced goods and national income includes domestic income.
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