Assertion (A): Capital gains from selling a house at a higher price are not part of national income.
Reason (R): A capital gain is a change in the value of an existing asset, not income from current production.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

National income counts only incomes earned by producing goods and services in the year.
R explains why the gain is left out.

Concept: Capital gains
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsWhat is counted and what is not

Practise this chapter →

Ten questions from Measuring National Income, at your own pace.

Practise this chapter →

Ten questions from Measuring National Income, at your own pace.

Practise this chapter All 69 questions in Measuring National Income Revise the notes for Measuring National Income

Assertion (A): Capital gains from selling a house at a higher price are not part of national income.Reason (R): A capital gain is a change in the value of an existing asset, not income from current production.

Explanation

Assertion (A): Capital gains from selling a house at a higher price are not part of national income.
Reason (R): A capital gain is a change in the value of an existing asset, not income from current production.