Explanation

Statement (B) is not correct: net factor payments earned from abroad are included in Gross National Product (GNP = GDP + net factor income from abroad), not in Gross Domestic Product, which measures production within the domestic territory. Statements (A), (C) and (D) are correct: imports are subtracted in the expenditure approach, second-hand sales are excluded to avoid double counting, and inventories form part of gross domestic capital formation. The answer is (B).