How will you treat the following while estimating domestic product of a country? Give reasons for your answer:

(a) Profits earned by branches of country’s bank in other countries

(b) Gifts given by an employer to his employees on Independence Day

(c) Purchase of goods by foreign tourists

a) Profits earned by branches of country’s bank in other countries - It is not included in estimating the domestic product of a country because the profits are earned beyond the domestic territory of the country.

b) Gifts given by an employer to his employees on Independence Day - It is not included in estimating the domestic product of a country because it is a transfer payment.

c) Purchase of goods by foreign tourists - It will be included in estimating the domestic product of a country because the goods are produced and sold within the domestic territory of the country.