Give reasons, explain how the following are treated in estimating national income : 1.wheat grows by a farmer but used for family's cnsumption. 2.rent recieved by an indian resident from russian embassy in india. 3. coe given to residents of china working in indian embassy in china. 4. profit earned by a branch of state bank of india in england. 5.earnings of shareholders from the sale of shares. 6. payment of income tax by a producing unit. 7. interest recieved by an individual from banks. 8. financial help given to flood victims.
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Solution 1)
Wheat grown by a farmer but used entirely for family's consumption will be included while estimating the National Income, as the production is done for self consumption purpose and is related to current production.
Solution 2)
Income earned by Indian resident in Russian Embassy comes under Net Factor Income from Abroad (NFIA) and so it will be included while estimating the National Income.
Solution 3)
COE given to Chinese residents is a Factor Income to Abroad and so it will be subtracted while calculating National Income. AS National Income only includes income to domestic residents. Hence income to foreign national is deducted while estimating National Income.
Solution 4)
Profit earned by the branch of State Bank of India in England will be included while calculating National Income as it is a Factor Income.
Solution 5)
Earnings of shareholders from the sale of shares will be included while estimating the National Income as it is a part of mixed income under the income method.
Solution 6)
Payment of income tax is subtracted while calculating the Personal Income. So, it will be included while calculating the National Income.
Solution 7)
Interest received by an individual from banks is an income from financial securities and it will be included in calculating the National Income because it is treated as factor income.
Solution 8)
Financial help given to flood victims is an aid and will be considered as a transfer payment. So, it will not be included while estimating the National Income.
Wheat grown by a farmer but used entirely for family's consumption will be included while estimating the National Income, as the production is done for self consumption purpose and is related to current production.
Solution 2)
Income earned by Indian resident in Russian Embassy comes under Net Factor Income from Abroad (NFIA) and so it will be included while estimating the National Income.
Solution 3)
COE given to Chinese residents is a Factor Income to Abroad and so it will be subtracted while calculating National Income. AS National Income only includes income to domestic residents. Hence income to foreign national is deducted while estimating National Income.
Solution 4)
Profit earned by the branch of State Bank of India in England will be included while calculating National Income as it is a Factor Income.
Solution 5)
Earnings of shareholders from the sale of shares will be included while estimating the National Income as it is a part of mixed income under the income method.
Solution 6)
Payment of income tax is subtracted while calculating the Personal Income. So, it will be included while calculating the National Income.
Solution 7)
Interest received by an individual from banks is an income from financial securities and it will be included in calculating the National Income because it is treated as factor income.
Solution 8)
Financial help given to flood victims is an aid and will be considered as a transfer payment. So, it will not be included while estimating the National Income.
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Answer:
1wheat is grown by farmers but used for family consumption
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