1-How will you treat the following in estimating rational income of India?
Give reasons for your answer. (a) Value of bonus shares received by shareholders of a company.
(b)Interest received on loan given to a foreign company in India.
(c) Family members working free on the farm owned by the family
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National income is measures are GDP,GNP,NDP,NNP.
GDP is total value of final goods and services produced WITHIN a country. GNP is total final goods and services produced by nationals of the country. Whereas NDP AND NNP are deducting depreciation(wearing of machines) from GDP and GNP respectively.
GDP is used in calculating National Income.All the three above are not considered in calculating National Income,because 1) For the first option GDP consider only income produced within country,whereas GNP considers the foreign income.
2)Same as above
3)Entertainment tax is indirect tax and it is not a factor of production,so it is also not considered in calculating National Income.
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