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CSEET · Economic and Business Environment · National Income Accounting and Related Concepts

Which item is included in Personal Income but is NOT part of National Income?

An old age pension is included in Personal Income but not in National Income. It is a transfer payment, received without providing a current productive service. Wages, rent and profit are factor incomes and are already counted in National Income.

  1. AOld age pension received by a household from the governmentCorrect
  2. BWages paid to workers by a firm
  3. CRent received by a landowner
  4. DProfit earned by a proprietor

Explanation

Transfer payments such as pensions are received by households without any current productive service, so they are not in National Income but are added to get Personal Income. Wages, rent and profit are factor incomes already in National Income.

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