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Non-exchange transactions are a fundamental source of revenue for governments, primarily because they encompass taxes, which represent the largest portion of governmental revenue. In non-exchange transactions, the government receives resources with no direct quid pro quo; for example, citizens pay taxes without receiving something of equivalent value in return. This category includes income taxes, property taxes, sales taxes, and various fees assessed without corresponding direct services provided.

In contrast, exchange transactions, while they do occur, typically involve services provided in return for payment and do not generally generate the extensive revenue streams that tax-based income does. Grants and donations, while beneficial to governmental entities, do not consistently provide the stable revenue that taxes do. Investment income can contribute to government revenues but typically constitutes a smaller, more variable share compared to tax revenues. Hence, non-exchange transactions are the most significant revenue source for government operations.