Question : Which of the following is NOT a component of national income?
Option 1: Compensation of employees
Option 2: Operating surplus
Option 3: Indirect taxes
Option 4: Net factor income from abroad
Correct Answer: Indirect taxes
Solution : The correct answer is (c) Indirect taxes.
Indirect taxes are not considered a component of national income. National income refers to the total income earned by individuals and businesses within a country's borders. It includes various components that reflect the different sources of income generated in the economy.
Indirect taxes, on the other hand, are taxes levied on the production, sale, or consumption of goods and services, such as value-added taxes (VAT) or sales taxes. While indirect taxes are an important component of government revenue and are included in the calculation of GDP, they are not considered a part of national income.
