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Expenditure on purchasing a machine installed in production unit give a reason how following can be treated in estimating national income?
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Estimating National Income: Treatment of Expenditure on Purchasing a Machine Installed in Production Unit
Expenditure on purchasing a machine installed in a production unit is an investment expenditure. It is considered as a part of Gross Domestic Product (GDP) and is included in the estimation of national income. The treatment of this expenditure in estimating national income is explained below.
1. Gross Domestic Product (GDP):
GDP is the total market value of all goods and services produced within the domestic territory of a country during a particular period of time. Investment expenditure, which includes expenditure on purchasing a machine installed in a production unit, is a part of GDP.
2. Gross National Product (GNP):
GNP is the total market value of all goods and services produced by the residents of a country, both domestically and abroad, during a particular period of time. Expenditure on purchasing a machine installed in a production unit is considered as a part of GNP.
3. Capital Formation:
Expenditure on purchasing a machine installed in a production unit is a part of capital formation. Capital formation refers to the process of increasing the stock of capital goods in an economy. Capital goods are those goods that are used for producing other goods and services.
4. National Income:
National income is the sum of all incomes earned by the residents of a country during a particular period of time. Expenditure on purchasing a machine installed in a production unit is considered as a part of national income.
Conclusion:
Expenditure on purchasing a machine installed in a production unit is an investment expenditure, and it is considered as a part of Gross Domestic Product (GDP), Gross National Product (GNP), capital formation, and national income. It is important to include this expenditure in the estimation of national income as it contributes to the overall economic growth and development of a country.
Expenditure on purchasing a machine installed in a production unit is an investment expenditure. It is considered as a part of Gross Domestic Product (GDP) and is included in the estimation of national income. The treatment of this expenditure in estimating national income is explained below.
1. Gross Domestic Product (GDP):
GDP is the total market value of all goods and services produced within the domestic territory of a country during a particular period of time. Investment expenditure, which includes expenditure on purchasing a machine installed in a production unit, is a part of GDP.
2. Gross National Product (GNP):
GNP is the total market value of all goods and services produced by the residents of a country, both domestically and abroad, during a particular period of time. Expenditure on purchasing a machine installed in a production unit is considered as a part of GNP.
3. Capital Formation:
Expenditure on purchasing a machine installed in a production unit is a part of capital formation. Capital formation refers to the process of increasing the stock of capital goods in an economy. Capital goods are those goods that are used for producing other goods and services.
4. National Income:
National income is the sum of all incomes earned by the residents of a country during a particular period of time. Expenditure on purchasing a machine installed in a production unit is considered as a part of national income.
Conclusion:
Expenditure on purchasing a machine installed in a production unit is an investment expenditure, and it is considered as a part of Gross Domestic Product (GDP), Gross National Product (GNP), capital formation, and national income. It is important to include this expenditure in the estimation of national income as it contributes to the overall economic growth and development of a country.
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Expenditure on purchasing a machine installed in production unit give a reason how following can be treated in estimating national income?
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Expenditure on purchasing a machine installed in production unit give a reason how following can be treated in estimating national income? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Expenditure on purchasing a machine installed in production unit give a reason how following can be treated in estimating national income? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Expenditure on purchasing a machine installed in production unit give a reason how following can be treated in estimating national income?.
Expenditure on purchasing a machine installed in production unit give a reason how following can be treated in estimating national income? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Expenditure on purchasing a machine installed in production unit give a reason how following can be treated in estimating national income? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Expenditure on purchasing a machine installed in production unit give a reason how following can be treated in estimating national income?.
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