While estimating national income by the expenditure method, which of the following is not treated as expenditure on current-year output?
Answer and explanation
Correct answer: Purchase of previously issued shares
Purchasing previously issued shares transfers ownership of an existing financial asset from one person to another. It does not represent a purchase of a good or service produced in the current year, so it is excluded from expenditure on current output. In contrast, a new machine is investment, government textbooks are government final consumption, and new furniture is household consumption.
Frequently asked questions
What is the correct answer to this question?
Purchase of previously issued shares
Why is this the correct answer?
Purchasing previously issued shares transfers ownership of an existing financial asset from one person to another. It does not represent a purchase of a good or service produced in the current year, so it is excluded from expenditure on current output. In contrast, a new machine is investment, government textbooks are government final consumption, and new furniture is household consumption.
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.
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