Which transaction will be included in current-year NDP?
Answer and explanation
Correct answer: Broker’s service provided during the sale of an old house
NDP measures the value of currently produced final goods and services within the domestic territory, after deducting depreciation. The old house itself was produced in an earlier year, and share repurchase is a financial transaction rather than current production. A broker’s service supplied in the current year is a newly produced market service, so its fee is included in current-year NDP.
Frequently asked questions
What is the correct answer to this question?
Broker’s service provided during the sale of an old house
Why is this the correct answer?
NDP measures the value of currently produced final goods and services within the domestic territory, after deducting depreciation. The old house itself was produced in an earlier year, and share repurchase is a financial transaction rather than current production. A broker’s service supplied in the current year is a newly produced market service, so its fee is included in current-year NDP.
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.
