Question : Which of the following is not included in the calculation of national income?
Option 1: Wages paid to workers
Option 2: Rental income
Option 3: Interest income
Option 4: Profits earned by foreign firms in the country
Correct Answer: Profits earned by foreign firms in the country
Solution : The correct answer is (d) Profits earned by foreign firms in the country
Profits earned by foreign firms in the country are not included in the calculation of national income. National income measures the income earned by domestic factors of production, which includes wages paid to workers, rental income, and interest income. Profits earned by foreign firms are part of the income generated by foreign factors of production and are accounted for in the balance of payments rather than in the calculation of national income.
Related Questions
Trending Articles/News
