When is a broker's service included in GDP?
Answer and explanation
Correct answer: When commission is earned for a service in the current year
GDP records the market value of final goods and services produced during the current period. A broker who completes a transaction and receives commission has provided a current, paid service, so that commission is included in GDP; option B is correct. No service or a free transaction creates no recorded market payment, while the resale value of a used good itself is not new current production.
Frequently asked questions
What is the correct answer to this question?
When commission is earned for a service in the current year
Why is this the correct answer?
GDP records the market value of final goods and services produced during the current period. A broker who completes a transaction and receives commission has provided a current, paid service, so that commission is included in GDP; option B is correct. No service or a free transaction creates no recorded market payment, while the resale value of a used good itself is not new current production.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
