Question : Which of the following is not included in the calculation of national income?
Option 1: Payments for government transfer programs
Option 2: Interest income earned by domestic residents from foreign investments
Option 3: Profit earned by domestic firms in foreign countries
Option 4: Payments for goods and services in the underground economy
Correct Answer: Payments for goods and services in the underground economy
Solution : The correct answer is (d) Payments for goods and services in the underground economy
The underground economy refers to economic activities that are not recorded or reported to the government for taxation or statistical purposes. These activities often involve illegal or informal transactions, such as black market sales or unreported income. Since these activities are not captured in official records, they are typically not included in the calculation of national income.
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