Practicing Success
Which out of the following will be included in National Income? (A) Ramesh sold his car for Rs. 5,00,000 which he used for 2 years Choose the correct answer from the options given below : |
(B), (C), (E) Only (D), (C), (E) Only (C) and (E) Only (A), (B), (C), (E) Only |
(C) and (E) Only |
The correct answer is (C), (E) Only. National income is the total value of all the final goods and services produced in an economy during a given period of time. It is calculated as the sum of consumption, investment, government spending, and net exports. Option (A) is incorrect because the sale of a second-hand car is not a production of goods or services. It is simply a transfer of ownership of an existing asset. Option (B) is incorrect : Interest paid on car loan taken by Mohan is a transfer payment and does not represent current production. Option (C) is correct because interest on debentures is a payment to investors for the use of their funds. It is a part of the cost of capital and is therefore included in national income. Option (D) is incorrect because the purchase of goods worth Rs. 1000 to prepare cakes to be sold in an exhibition is an intermediate stage of production. It is not a final good or service and therefore not included in national income. Option (E) is correct because profit earned by Reliance Industries from their branch in London is a production of goods or services. It is therefore included in national income. Therefore, the only options that are correct are (C), and (E). |