Question

Why are savings of non-departmental government enterprises deducted from National Income?

Options

• They are Government retained earnings; not private income

• They are transfer payment from government to private sector

• They are direct transfers to the private sector

• They are factor incomes of private firms

Answer 1

Savings of non-departmental government enterprises are Government retained earnings. Since they do not accrue to the private sector, they are deducted.