Question

ch of the following items will be included/not included while estimating Gross [3] Domestic Product? Give valid reasons in support of your answer.
(a)Wages received by an Indian working in the British Embassy in India. (b)Financial aids received from abroad after ‘‘Fani cyclone’’. (c)Purchase of second hand machinery from abroad.

Answer 1

Answer:

(i) It is not included because it is an intermediate cost of the firm.  

(ii) It is not included because the loan is taken to meet consumption expenditure and therefore interest paid on such a loan is not a factor payment.  

(iii) It is included because it is an investment expenditure, a final expenditure.

Explanation: