Which of the following will NOT be included in the estimation of national income?

(i) Expenses on electricity by a factory

(ii) Financial help to earthquake victims

(iii) Imputed value of production for self-consumption

(iv) Brokerage on sale of bonds

Correct option is C

The correct answer is 3. Both (i) and (ii) Here's why:

• Expenses on electricity by a factory (i): This is an intermediate consumption cost and is not directly included in national income calculations. It's part of the production process and factored into the final product's value.
• Financial help to earthquake victims (ii): This is a transfer payment, not related to the production of goods or services. Transfer payments are not included in national income calculations.

Key points to remember:

• National income measures the total value of goods and services produced within a country in a given period.
• It focuses on final goods and services, not intermediate goods used in production.
• Transfer payments and non-market activities are generally excluded.
• The value of financial services is included in national income.