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National income ignores

  • A.sales of a firm.
  • B.export of IT sector.
  • C.salary of employees.
  • D.sale of land.

Answer: D

Correct answer: sale of land.

National income counts current production. The sale of land merely transfers an existing asset from one owner to another and produces nothing, so it is excluded - though the estate agent’s commission, being a service rendered this year, is included. Sales, exports and salaries all represent current output or the income arising from it.

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