Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Which of the following is added in the estimation of national income?

Options:

Payment of an interest by an individual to a bank.

Bonus paid to employees.

National debt interest.

Payment of corporate tax by a firm.

Correct Answer:

Bonus paid to employees.

Explanation:

The correct answer is Option (2) → Bonus paid to employees.

In the estimation of national income (particularly using the income method), only factor incomes are included. These are payments made to factors of production (land, labor, capital, and entrepreneurship) for their contribution to the production process.

  • Payment of interest by an individual to a bankNot included, as it is a personal transaction and not part of factor income.

  • Bonus paid to employeesIncluded, as it is part of compensation of employees, which is a component of national income.

  • National debt interestNot included, as it is a transfer payment made by the government, not against any productive service.

  • Payment of corporate tax by a firmNot included in national income; it's a tax and not a payment to a factor of production.