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Which among the following must be excluded while calculating National Income by expenditure method?
1. Purchase of shares in the National Stock Exchange
2. Central Vista Redevelopment Project
3. Prime Minister Research Fellowships (PMRF)
4. Donations to Prime Minister National Relief Fund
Select the correct answer using the code given below.
- a)1 and 4 only
- b)2 and 3 only
- c)1, 2 and 3 only
- d)1, 3 and 4 only
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
Which among the following must be excluded while calculating National ...
There are three methods of measuring national income. They are (A) Output or value-added method (B) Income method (C) Expenditure Method. National income can also be measured at the disposition phase with the help of the expenditure method. It estimates national income by measuring final expenditure on the gross domestic product at market price. Expenditure incurred on final goods is final expenditure. Final goods are those goods that are demanded final consumption and investment. The demand for final consumption and investment is made by all the four sectors of the economy, namely, households, firms and the government and the rest of the world. The main steps involved in measuring national income by this method are: Firstly: Estimate the following expenditure incurred on the final products of all the sectors of the economy.
(i) Private final consumption expenditure.
(ii) Government final consumption expenditure.
(iii) Gross Investment
(iv) Net exports (exports - imports).
he sum total of all the above expenditures on final products of all the sectors of the economy gives us the gross domestic product at market price. Secondly: Deduct consumption of fixed capital (Depreciation) and net indirect taxes from the gross domestic product at market price to get net domestic product at factor cost. NDPfc = GDPmp - consumption of fixed capital - Net indirect tax (indirect taxes - subsidies) Thirdly: Add net factor income from abroad to the net domestic product at factor cost to obtain the net national product at factor cost which is the national income. NNPFC = NDPfc + net factor income from abroad. The main precautions required to be taken in estimating national income by expenditure method are:
(i) Expenditure on intermediate products should not be included to avoid the problem of double counting.
(ii) Expenditure on gifts, donations, taxes, scholarships etc. should not be included in National Income as these are transfer payments. Hence options 3 and 4 are correct.
(iii) Expenditure incurred on the purchase of second-hand goods should not be included as the expenditure on these goods has already been included when bought for the first time.
(iv) Expenditure on the purchase of bonds and shares should not be included as these are financial transactions. Hence option 1 is correct.
(i) Private final consumption expenditure.
(ii) Government final consumption expenditure.
(iii) Gross Investment
(iv) Net exports (exports - imports).
he sum total of all the above expenditures on final products of all the sectors of the economy gives us the gross domestic product at market price. Secondly: Deduct consumption of fixed capital (Depreciation) and net indirect taxes from the gross domestic product at market price to get net domestic product at factor cost. NDPfc = GDPmp - consumption of fixed capital - Net indirect tax (indirect taxes - subsidies) Thirdly: Add net factor income from abroad to the net domestic product at factor cost to obtain the net national product at factor cost which is the national income. NNPFC = NDPfc + net factor income from abroad. The main precautions required to be taken in estimating national income by expenditure method are:
(i) Expenditure on intermediate products should not be included to avoid the problem of double counting.
(ii) Expenditure on gifts, donations, taxes, scholarships etc. should not be included in National Income as these are transfer payments. Hence options 3 and 4 are correct.
(iii) Expenditure incurred on the purchase of second-hand goods should not be included as the expenditure on these goods has already been included when bought for the first time.
(iv) Expenditure on the purchase of bonds and shares should not be included as these are financial transactions. Hence option 1 is correct.
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Which among the following must be excluded while calculating National ...
Excluded Items in National Income Calculation:
National Income is calculated using different methods, such as the expenditure method. However, certain items must be excluded from this calculation to ensure accuracy. In this case, the following items should be excluded while calculating National Income by the expenditure method:
1. Purchase of shares in the National Stock Exchange:
- Purchase of shares in the stock exchange does not directly contribute to the production of goods and services in the economy. Hence, it is not considered as a part of national income.
2. Central Vista Redevelopment Project:
- The Central Vista Redevelopment Project involves government expenditure on infrastructure development and construction. This expenditure is considered as a transfer payment and does not add to the production of goods and services. Therefore, it is excluded from the calculation of national income.
3. Prime Minister Research Fellowships (PMRF):
- PMRF is a scholarship scheme provided by the government to support research activities. Since this is a transfer payment and does not result in the production of goods and services, it is not included in the calculation of national income.
4. Donations to Prime Minister National Relief Fund:
- Donations made to the Prime Minister National Relief Fund are considered as transfer payments and do not contribute to the production of goods and services. Therefore, these donations are excluded from the calculation of national income.
Therefore, while calculating National Income by the expenditure method, items such as the purchase of shares, government expenditure on specific projects, scholarships, and donations are excluded to ensure an accurate representation of the country's economic output.
National Income is calculated using different methods, such as the expenditure method. However, certain items must be excluded from this calculation to ensure accuracy. In this case, the following items should be excluded while calculating National Income by the expenditure method:
1. Purchase of shares in the National Stock Exchange:
- Purchase of shares in the stock exchange does not directly contribute to the production of goods and services in the economy. Hence, it is not considered as a part of national income.
2. Central Vista Redevelopment Project:
- The Central Vista Redevelopment Project involves government expenditure on infrastructure development and construction. This expenditure is considered as a transfer payment and does not add to the production of goods and services. Therefore, it is excluded from the calculation of national income.
3. Prime Minister Research Fellowships (PMRF):
- PMRF is a scholarship scheme provided by the government to support research activities. Since this is a transfer payment and does not result in the production of goods and services, it is not included in the calculation of national income.
4. Donations to Prime Minister National Relief Fund:
- Donations made to the Prime Minister National Relief Fund are considered as transfer payments and do not contribute to the production of goods and services. Therefore, these donations are excluded from the calculation of national income.
Therefore, while calculating National Income by the expenditure method, items such as the purchase of shares, government expenditure on specific projects, scholarships, and donations are excluded to ensure an accurate representation of the country's economic output.
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Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer?
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Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer?.
Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer?.
Solutions for Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
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Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Which among the following must be excluded while calculating National Income by expenditure method?1. Purchase of shares in the National Stock Exchange2. Central Vista Redevelopment Project3. Prime Minister Research Fellowships (PMRF)4. Donations to Prime Minister National Relief FundSelect the correct answer using the code given below.a)1 and 4 onlyb)2 and 3 onlyc)1, 2 and 3 onlyd)1, 3 and 4 onlyCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
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