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    Question

    What are super normal profits made by companies due to an unprecedented event, as indicated in the para above, known as?

    A Exceptional Income Correct Answer Incorrect Answer
    B Extraordinary Income Correct Answer Incorrect Answer
    C Windfall Gain Correct Answer Incorrect Answer
    D Unanticipated Gain Correct Answer Incorrect Answer
    E Super Normal Profits Correct Answer Incorrect Answer

    Solution

    Windfall gain (or windfall profit) is an unexpected gain in income from an unforeseen source/event. Windfall gains may take place due to sudden steep rise in prices of a commodity or extreme shortage of a resource, asset or product. For an individual, windfall gain could be a sudden spike in income due to one-time events like inheritance of property, money gained on selling property when its prices increase dramatically, etc. Windfall gain may also refer to gains from winning a lottery, betting income etc. A windfall tax is a one-off tax imposed by a government on a company on such windfall gains, which is over and above the normal rates of tax.

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