Question

Giving reason, state whether the following is treated in estimating national income:

Payment of fees to a lawyer engaged by a firm.

Answer 1

1. Payment of fees to a lawyer engaged by a firm is not included in the estimation of national income, being an intermediate expenditure. 
2. This is because the fee paid to the lawyer is considered as payment for productive services rendered by the lawyer, and it forms a part of the factor income earned in the economy.
3. The services provided by the lawyer contribute to the production of final goods and services, and thus, the fees paid for these services are included in the national income.