CSEET · Economic and Business Environment · National Income Accounting and Related Concepts
Which item would be EXCLUDED when national income is measured by the expenditure or product method?
The sale of a second-hand car between individuals is excluded because it does not represent current production; it was already counted in the year it was made. New houses, new roads and software exports all reflect current-year output and are included.
- APurchase of a newly built house by a family
- BSale proceeds of a second-hand car between two individualsCorrect
- CGovernment spending on new roads
- DExport of software services
Explanation
Only current production is counted. A second-hand car was counted when first produced, so its resale is a transfer of an existing asset and is excluded. The other items are current output or spending on it.
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