government production

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The part of the income of government which derives from the services of factors owned by the state or local authorities. This includes rent received from state-owned land and buildings, for example local authority housing. It is also possible for the state to operate productive services such as public utilities, either directly or through public corporations: any profits these make form part of the government's share of the national product. Where the government sector provides services to the public such as administration, defence, law and order, education, and health services, these form part of government production, and are by convention valued at what they cost.

Subjects: Economics.

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