Question : Which of the following is included in national income based on the expenditure method?
Option 1:
Social Security benefits
Option 2: Capital investments by businesses
Option 3: Foreign aid received by the country
Option 4: Personal income taxes
Correct Answer: Capital investments by businesses
Solution : The correct answer is (b) Capital investments by businesses
Capital investments by businesses, which refer to the spending on physical assets like machinery, equipment, and infrastructure, are included in the calculation of national income based on the expenditure method. These investments represent the purchase of new assets that contribute to economic production and are considered a component of total expenditure in the economy.
