Which of the following is included while calculating National Income?
Show Hint
- Transfer payments
- Sale of second-hand goods
- Value of final goods and services
- Illegal income
The Correct Option is C
Solution and Explanation
Step 1: Understanding the Concept:
National Income is the total value of final goods and services produced by the normal residents of a country during an accounting year.
Step 2: Detailed Explanation:
To avoid "double counting," only the value of final goods is included, not intermediate goods.
• Transfer Payments: (Pensions, scholarships) are excluded because no productive activity takes place in exchange.
• Second-hand Goods: Excluded because their value was already counted in the year they were originally produced.
• Illegal Income: Excluded due to lack of official records and social illegitimacy.
Step 3: Final Answer:
Only the value of final goods and services is included.
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