Explanation:

Here’s the thing about National Income (NI): it only includes the value of all final goods and services produced in a country in a given period. Let’s break down each option:

- Subsidized Lunch: These are often provided by the government, and their cost is usually recorded as current consumption expenditure. They’re included in NI calculations as part of government spending on goods and services.

- Old-age Pension: This is a transfer payment. People receive money, but no new goods or services are produced in exchange. Transfer payments are *not* counted in National Income.

- Free Medical Facilities: Even if free for the user, these represent government spending on health services—which are produced, delivered, and consumed—so they *are* included in NI.

- Construction of a House: This is a genuine addition of new capital and services, so it gets counted in National Income.

So, the correct answer is:

Option 2: Old-age Pension is not included in NI.