(i) The firm borrows from the bank to undertake productive activities. Hence, payment of interest by a firm to a bank will be included in National Income as the cost of borrowing funds.
(ii) Payments of interest by a bank to an individual will be included in National Income as the bank uses the individual's saving for productive purpose, that is, for lending further to earn interest.
(iii) Payment of interest by an individual to a bank will be included in National Income if the individual has taken loan for productive purpose. However, if the individual has taken loan from bank for consumption purpose, the interest paid shall not be included in National Income

(i) Taking care of aged parents will not be included in National Income as it does not involve the production of goods and services. It is a non-economic activity reflecting love and care for parents and it is difficult to estimate the market value of such activities.
(ii) Corporate tax is included in the National Income as a part of corporate profit, not separately.
(iii) Expenditure on providing police services by the government is included in National Income as it forms a part of government final consumption expenditure. 

(i) Fees to a mechanic paid by a firm will be included while estimating the GDPMP because the fee is being paid in return for the service provided by the mechanic.
(ii) Interest paid by an individual on a car loan taken from a bank will be included while estimating GDPMP because it is an income for the lending bank.
(iii) Expenditure on purchasing a car for use by a firm will be included while estimating \({ GDP }_{ MP }\)  because the car is purchased by the firm for final use. 

Double counting means estimating the value of goods and services more than once. This problem takes place when the output of all the producers is added up without considering the fact that output of one producer may be the input for the other producer. The problem of double counting should be avoided because it overestimates the national income.
To get rid of the problem of double counting, the value added method is used. Value added method estimates the contribution of each individual firm at different stages of production. It is assumed that every individual firm adds to the value of the product which it purchases from some other firm as intermediary goods. When we sum the value added by each individual firm at different stages of production, we attain the National Income without double counting.
The estimation of value added by an individual firm can be explained with the help of an example. Suppose there are four types of firms: farmer, thread manufacturer, cloth manufacturer and readymade garment manufacturer. Their value of output, intermediate consumption and value added are displayed in the table below:

Thus, the Gross Value Added by a Firm is the difference between the value of output and the value of intermediate consumption.

(a) Following precautions are to be taken under value added method:
(i) The value of self-consumption output should be included in the national income.
(ii) Imputed rent on the owner occupied house should be taken into consideration while measuring the national income.
(iii) Value of the sale and purchase of second hand goods and property should not be included in national income.
(b) Following precautions are to be taken under income method:
(i) The income from the illegal activities such as theft, smuggling and gambling should not be included in the national income.
(ii) Windfall gains such as lottery should not be included.
(iii) Transfer payment such as unemployment allowance, old age pension, donation to the religious I places, etc. should not be included in the national income.

(i) Rent received by a resident Indian from his property in Singapore will not be included in domestic product of India as this income is earned outside the domestic (economic) territory of India.
(ii)Salaries to Indians working in Japanese Embassy in India will not be a part of domestic product of India as embassy of Japan in India is not a part of domestic territory of India. Hence, this income is not earned within the domestic territory of India.
(iii) Profits earned by a branch of an American Bank in India will be included in domestic product of India as the branch of American bank is located within the domestic territory of India. Thus, it is the income earned within the domestic territory of India.
(iv)Salaries paid to Koreans working in Indian Embassy in Korea will be a part of domestic product of India because this income is earned within the domestic territory of India. Indian embassy in Korea is treated as located within the domestic territory of India.

Expenditure method of estimating National Income calculates the sum total of the expenditure by all the final users of goods and services plus addition to the stock with the producers and distributors. According to this method, expenditures on consumption and investment goods and government expenditures are aggregated as follows:
(i) Consumption Expenditure (C): Consumption expenditure includes expenditure on all 'goods and services.produced and sold to the final consumer during the year.
(ii) Investment 'Expenditure (I): Investment is the use of today's resources to expand tomorrow's production or consumption. Investment expenditure is expenditure incurred on by business firms on:
(a) New plants;
(b) Adding to the stock of inventories; and
(c) Newly constructed houses
(iii) Government Expenditure (G): Government expenditure includes all government expenditure on currently produced goods and services but excludes transfer p~yments while computing national income.
(iv) Net Exports (X - M): Net exports are defined as total exports minus total imports. Under expenditure method, National Income is calculated by summing up the final consumption expenditure, expenditure by business on plants, government spending and net exports.
National Income = C + I + G + (X - M)

(i) Profits earned by a foreign bank from its branches in India will not be included in domestic factor income of India because it is the factor income of a foreign country or it is the income of non-resident in India.
(ii) Scholarships given by the government of India will not be included in domestic factor income because it is a transfer payment and does not contribute to the flow of goods and services.
(iii) Profits earned by a resident of India from his company in Singapore will not be included in domestic factor income of India because it is the income of the resident earned abroad.
(iv) Salaries received by Indians working in American Embassy in India will be included in domestic factor income of India because it is the income of the normal residents of India, earned within the domestic territory of India.

Export receipts are not a part of net factor income abroad because:
(i) Exports refer to the purchase of domestically produced goods by the rest of the world. Goods produced within the domestic territory of a country are to be treated as a part of GDP.
(ii) Export receipts refer to revenue of the firms from the sale of its output. These are not the receipts of factor incomes from abroad, which are to be in the form or rent, interest, profit and wages.

Following efforts should be made in an economy to avoid continuous use of exhaustible natural resources in production:
(i) Increase the use of renewable resources
(ii) Explore the substitutes of resources
(iii) Reduce the wastage of resources 
(iv) Spread awareness about the effective and optimum use of natural resources