Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Which of the following will be included in the National Income of India?

(A) Donations given to a religious institution.
(B) Payment of Income Tax
(C) Scholarship given to students
(D) Profits earned by an Indian company from its branch in France
(E) Purchase of a television set by a consumer household

Choose the correct answer from the options given below :

Options:

(A) and (B) Only

(B) and (C) Only

(D) and (E) Only

(A), (C) and (E) Only

Correct Answer:

(D) and (E) Only

Explanation:

The only options included in the National Income of India are profits earned by an Indian company from its branch in France and the purchase of a television set by a consumer household.

National Income of India refers to the total income earned by residents of India in a particular period. It includes income from all sources, both domestic and foreign.

  • Donations given to a religious institution: These are considered transfers and not income, hence they are not included in the National Income.

  • Payment of Income Tax: Income tax is a deduction from income, not a part of income. Hence, it is not included in the National Income.

  • Scholarship given to students: Scholarships are considered transfers and not income, hence they are not included in the National Income.

  • Profits earned by an Indian company from its branch in France: This income is earned by an Indian resident, irrespective of the geographical location of its source. Hence, it is included in the National Income.

  • Purchase of a television set by a consumer household: This is a final consumption expenditure and not income. Hence, it is not included in the National Income.