Economic Awareness - Sectors of Indian Economy
In the Income Method, which of the following incomes is included under 'Interest'?
In the Income Method, which of the following incomes is included under 'Interest'?
medium Q14 of 15
Step-by-Step Solution
Step 1: Understand 'Interest' in Income Method
Interest in Income Method refers to income earned by capital owners on their investments.Step 2: Differentiate types of interest
Interest paid on personal loans or government securities are transfer payments or financial transactions, not factor incomes. Interest earned by banks is an intermediate income, not final factor income.Final Answer:
Interest earned by capital owners on their investments → Option DQuick Check:
Interest in Income Method = Income of capital owners ✅
Quick Trick: Interest = income of capital owners, not financial transfers.
Common Mistakes:
- Including all interest payments as factor income.
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