Giving reason, explain how should the following be treated in estimation of National Income:
(i) Interest paid by banks on deposits by individuals.
(ii) National debt interest.
(i) Interest paid by banks on deposits by individuals
should be included in estimation of National Income as - it will be treated as factor income.
(ii) National debt interest should not be included in estimation of National Income as it is assumed that government borrows for consumption and hence, it is treated as transfer payment.