In the expenditure method of national income, which of the following payments is not included in final expenditure?
Answer and explanation
Correct answer: Unemployment allowance
Unemployment allowance is a transfer payment. It redistributes income but does not purchase a newly produced good or service during the current accounting period, so it is not included directly in final expenditure. Household purchases of bread are consumption, road construction is government investment or expenditure on current output, and exports are included as external demand.
Frequently asked questions
What is the correct answer to this question?
Unemployment allowance
Why is this the correct answer?
Unemployment allowance is a transfer payment. It redistributes income but does not purchase a newly produced good or service during the current accounting period, so it is not included directly in final expenditure. Household purchases of bread are consumption, road construction is government investment or expenditure on current output, and exports are included as external demand.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Methods of calculating national income - Expenditure Method.
