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Question
Outline any two precautions that should be taken in estimation of National income by Expenditure method.
Solution
- All final products irrespective of whether these are marketed or not, are to be included.
- Expenditure on intermediate goods is to be excluded.
- Expenditure on second hand goods is to be excluded.
- Expenditure on financial assets is to be excluded.
- Government expenditure on transfer payments is to be excluded.
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