Question

Interest paid on loan taken to purchase a taxi
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Answer 1

Answer:

By giving reason, explain how should the following be treated in estimating gross domestic product at market price?

(i) Fees to a mechanic paid by a firm. (ii) Interest paid by an individual on a car

loan taken from a bank.

(iii) Expenditure on purchasing a car for use by a firm.

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Answer 2

Answer:

interest paid on loan taken to purchase a taxi is taken to meet consumption expenditure and therefore interest paid on such a loan is not a factor payment.

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