How should the following be treated in estimating national income of a country? You must give reasons for your answer. |
(i) Taking care of aged parents |
(ii) Payment of corporate tax |
(iii) Expenditure on providing police services by the government |
Answer:
(i) Taking care of aged parents: This will not be included in national income as it does not involve any production of goods and services. Moreover, these services that are meant for self-consumption and it is difficult to estimate the market value of such services. (ii) Payment of corporate tax: Corporate tax is a part of corporate profit and therefore, it is included in national income of the country. (iii) Expenditure on providing police services by the government: It is included in national income of a country as it forms a part of Government Final Consumption Expenditure.
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