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    Question

    Which of the following will NOT be included while

    calculating National Income of a country for a given year?
    A Commission earned by a broker on sale of shares Correct Answer Incorrect Answer
    B Construction of a newly built residential house Correct Answer Incorrect Answer
    C Salary paid to government employees Correct Answer Incorrect Answer
    D Old-age pension paid by the government to retired citizens Correct Answer Incorrect Answer
    E Fees paid to a lawyer for legal services Correct Answer Incorrect Answer

    Solution

    Old age pension is not included as it is a transfer payment. These are payments made by the government to individuals for which no productive service is rendered in return during the current year. Since National Income only accounts for the value of final goods and services produced (factor income), transfer payments like pensions, scholarships, and unemployment benefits are excluded to avoid overstating economic activity. 

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