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WAEC Economics 1996 Question 30

Question 30

National Income

In calculating the Gross National Product (GNP) by the income approach, all the following are included except

  1. A.wages and salaries
  2. B.direct taxes paid by persons and companies
  3. C.rents on houses
  4. D.retirement benefits
  5. E.business profits
Show the answer and explanation

Answer: D (retirement benefits)

Explanation

Retirement benefits (pensions) are transfer payments for no current production, so they are left out; incomes are counted before direct tax.