Explain ‘non-monetary exchanges’ as a limitation of using gross domestic product as an index of welfare of a country.
Or
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

The major limitation of GDP as an index of welfare of country is that GNP does not take into account those transactions that are not expressed in monetary terms.Non-monetary exchanges are not considered for the estimation of domestic income. These transactions such as domestic services rendered by house wife, kitchen gardening and a parent teaching her child. It is difficult to ascertain their market value and not rendered for the purpose of earning income. Though these services are rendered for development of a child and welfare of the family, it is not included in the gross national product. Thus, 'non-monetary exchanges' as a limitation of using gross domestic product as an index of welfare of a country.
or, 

i. Profits earned by branches of country's bank in other countries are not included in the estimation of national income because the branches of country's bank in other countries are outside the domestic territory.
ii. Gifts given by an employer to his employees on Independence Day are included in the domestic income because the gifts given by the employer are compensation in kind.
iii. Purchase of goods by foreign tourists is included in the estimation of domestic income because they are exports and part of domestic income.