Question
Why are windfall gains not included while calculating
national income?Solution
Windfall gains are unexpected, unearned income such as lottery winnings or sudden profits from stock price increases that are not associated with any productive economic activity. National income calculations focus on income generated through the production of goods and services. Since windfall gains do not result from productive economic activities that create value in the economy, they are excluded from national income measurements. Only income derived from wages, rents, interest, and profits earned through actual productive activities is included in national income calculations.