Question

How, should the following be treated while estimating national income ? Give reasons. 

(i) Expenditure on education of children by a family. 

(ii) Payment of electricity bill by a school.

Answer 1

Reasons: 

(i) Expenditure on the education of children by a family is included in national income since it is a part of Private Final Consumption Expenditure. 

(ii) Payment of electricity bill by a school is not included in national income since it is a part of intermediate consumption