When can a broker's commission be included in NNP calculation?
Answer and explanation
Correct answer: When it is service income earned in the current year
A broker’s commission can be included in NNP when it is earned for a service provided during the current year. The commission represents payment for a newly produced market service, so it contributes to current national income. The old car or other second-hand asset itself is not counted again, because its production was recorded earlier.
Frequently asked questions
What is the correct answer to this question?
When it is service income earned in the current year
Why is this the correct answer?
A broker’s commission can be included in NNP when it is earned for a service provided during the current year. The commission represents payment for a newly produced market service, so it contributes to current national income. The old car or other second-hand asset itself is not counted again, because its production was recorded earlier.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
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