Ms. Reeta D'Costa, retired from the post of Income Tax Commissioner in the year 2023. Apart from her pension, she also receives the following from various sources : - Rental income from a flat she owns. - Interest income from her fixed deposits. - Money sent by her children settled abroad. Identify and classify, her monthly incomes into 'factor income' and 'transfer income', with valid reasons. For a hypothetical economy, assuming there are only two firm (X and Y) with equal values of Gross Value Added (GVA). On the basis of the following data, estimate the values of Domestic Sales by firm X :

Question

Accepted Answer

Analysis of Ms. Reeta D'Costa's income:

1. Pension: Included in National Income
   - It is a factor income for past services rendered
   - Part of compensation of employees

2. Rental income from flat: Included in National Income
   - It is factor income from property
   - Part of operating surplus

3. Interest from bank deposit: Included in National Income
   - It is factor income from capital
   - Part of operating surplus

4. Gift from son: Excluded from National Income
   - It is a transfer payment
   - Not earned through productive activity

5. Winning lottery: Excluded from National Income
   - It is a windfall gain
   - Not earned through productive activity