How is production-related overtime payment made by a company to its employees treated in GDP accounting?
Answer and explanation
Correct answer: As part of compensation of employees
Overtime payment is additional remuneration received by employees in return for labour services supplied during extra working hours. Since it is connected with current production and is paid by the employer to workers, it forms part of compensation of employees and is included in factor income. It is not a capital gain, transfer payment, or import adjustment.
Frequently asked questions
What is the correct answer to this question?
As part of compensation of employees
Why is this the correct answer?
Overtime payment is additional remuneration received by employees in return for labour services supplied during extra working hours. Since it is connected with current production and is paid by the employer to workers, it forms part of compensation of employees and is included in factor income. It is not a capital gain, transfer payment, or import adjustment.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
Student feedback
Was this question useful?
👍 0 Helpful 👎 0 Not helpful
Yes 0% No 0%
0 responsesStudent Reviews
No published reviews yet.
