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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


Team Careers360 12th Jan, 2024
Answer (1)
Team Careers360 16th Jan, 2024

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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