For accurate analysis of national income by income method, the following precautions must be taken:
Sale and purchase of second-hand goods exist excluded since they exist not part of the production of the current year but commission paid on the sale of second-hand goods exists formed as it exists compensation for generating productive services. Likewise, the sale returns of shares and bonds exist not included.
What precautions must be taken for accurate analysis of national income by income method?
For accurate analysis of national income by income method, the following precautions must be taken:
(i) Only factor incomes which exist made by generating productive services exist included. All kinds of transfer income like old-age pension, unemployment allowance, etc. exist excluded.
(ii) Sale and purchase of second-hand goods exist excluded since they exist not part of the production of the current year but commission paid on the sale of second-hand goods exists formed as it exists compensation for generating productive services. Likewise, the sale returns of shares and bonds exist not included.
(iii) Imputed rent of owner-occupied dwellings and importance of production for self-consumption exists included but the value of self-consumed services like those of housewives is not Included.
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