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Explain the precautions needed to be …

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Explain the precautions needed to be taken while calculating N.I by expenditure.

Posted by Debraj Soni 6 years, 2 months ago

CBSE > Class 12 > Economics

2 answers

Bushra Ahsan 6 years, 1 month ago

Precautions of expenditure method are~ 1 Expenditure on intermediate goods not included. 2 Expenditure on transfer payments not included. 3 Expenditure on purchase of second hand goods not included. 4 Expenditure on purchase of financial assets not included. 5 Expenditure on self consumption included.

Gargi Sharma 6 years, 2 months ago

Precautions to be taken are:- 1.To avoid double counting , expenditure on all intermediate goods and services is excluded. 2.Government expenditure on all transfer payments like scholarships, old age pension etc.is not included. 3.Expenditure on purchase of second hand goods is excluded. 4.Expenditure on purchase of old shares/bonds or new shares/bonds etc. Is excluded and likewise,gifts from abroad which bring transfer payments are not included.

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