Question : Which of the following is NOT included in national income based on the expenditure method?
Option 1: Personal consumption expenditure
Option 2: Government expenditure
Option 3: Net exports
Option 4: Personal savings
Correct Answer: Personal savings
Solution : The correct answer is (d) Personal savings
The expenditure method is one of the approaches used to calculate national income, which focuses on the total expenditure or spending in the economy.
Personal savings represent a portion of personal income that is not spent on consumption or taxes. While personal savings are an important aspect of individuals' financial behavior, they are not considered as part of the total expenditure or spending in the economy. Therefore, personal savings are not included in the calculation of national income using the expenditure method.
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