Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Which of the following are included while calculating national income by expenditure method?

(A) Expenditure on single-use producer goods purchased by firms.
(B) Expenditure incurred by a private trust running an orphanage on the education of the children.
(C) Expenditure incurred by the government on building dams and bridges across the nation.
(D) Expenditure by foreigners on the final goods produced in the country.

Choose the correct answer from the options given below:

Options:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer:

(B), (C) and (D) only

Explanation:

The correct answer is Option (4) → (B), (C) and (D) only

(A) Expenditure on single-use producer goods (intermediate goods) → Excluded because it leads to double counting.

(B) Expenditure by private trust on education → A private non-profit institution serving households (like an orphanage or private trust) makes final consumption expenditure on behalf of the households it serves. This type of expenditure is included as part of Private Final Consumption Expenditure.

(C) Government expenditure on dams and bridges → Included as capital formation.

(D) Expenditure by foreigners on domestic goods → Included as exports.