question_answer

Giving reasons, explain the treatment assigned to the following while estimating National Income:

(i) Family members working free on the farm owned by the family.

(ii) Payment of interest on borrowings by general government.

Answer:

(i) It would be not be included in National Income because production for self, consumption is not included is the estimation of National Income.

(ii) It would not be included because it is a non, factor payment and it doesn't relate to flow of goods and services.