Expenditure on Free Education by Government

The expenditure done by the government in providing free education is included in the national income. This is because it contributes to the development of human capital, which is an important factor for economic growth. Education is an investment in the future of the country, and it helps to create a skilled workforce that can contribute to the economy. Moreover, the provision of free education is a form of social welfare, which aims to reduce inequality and increase access to education for all.

Payment of Fees to Lawyer Engaged by Firm

The payment of fees to a lawyer engaged by a firm is also included in the national income, as it is a form of economic activity. However, it is important to note that not all payments made to lawyers are included in the national income. Only payments made for legal services that are productive in nature are included. For example, payments made for legal services related to the production of goods and services are included, while payments made for legal services related to personal matters such as divorce or criminal cases are not.

Reasons for Inclusion in National Income

The inclusion of these expenditures in the national income is important because it provides an accurate measure of the economic activity in the country. It helps policymakers to make informed decisions about resource allocation and economic development. Moreover, it provides a basis for calculating the Gross Domestic Product (GDP), which is an important indicator of economic growth.

Conclusion

In conclusion, both the expenditure done by the government in providing free education and payment of fees to lawyers engaged by firms are included in the national income. They contribute to the economic activity of the country and are important for economic growth and development. However, it is important to note that not all payments made to lawyers are included in the national income. Only payments made for productive legal services are included.

A----- It should not be included as it is a transfer income.
B----- It should not be included as it is a intermediate consumption.