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Giving Reason Explain How Should the Following Be Treated in Estimating Gross Domestic Product at Market Price? Interest Paid by an Individual on a Car Loan Taken from a Bank. - Economics

Giving reason explain how should the following be treated in estimating gross domestic product at market price?

Interest paid by an individual on a car loan taken from a bank.

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Solution

Interest paid by an individual on a car loan taken from a bank is not included in the estimation of the gross domestic product at market price because the car loan was taken only for consumption purpose.

Concept: Gross and Net Domestic Product (GDP and NDP)
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