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Why are pure exchange transactions excluded from national income? - Economics

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Question

Why are pure exchange transactions excluded from national income?

Very Short Answer
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Solution

Pure exchange transactions are excluded from national income because they do not involve new output and would be a false indicator of a country's actual economic activity. 

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Chapter 18: National Income and Circular Flow of Income - TEST YOURSELF QUESTIONS [Page 362]

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Frank Economics [English] Class 12 ISC
Chapter 18 National Income and Circular Flow of Income
TEST YOURSELF QUESTIONS | Q 3. | Page 362
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