Under the expenditure method, which of the following items is included in the current year's gross domestic product?
Answer and explanation
Correct answer: Commission paid to a property broker for the sale of an old house
The commission paid to a property broker is payment for a brokerage service supplied during the current year, so that service contributes to current GDP. The old house itself was produced in an earlier period; its resale merely transfers ownership and does not add the house's full value again. A company's share repurchase and the purchase of government bonds are financial transactions, not purchases of current goods or services. Thus, only the current brokerage service among the options is included.
Frequently asked questions
What is the correct answer to this question?
Commission paid to a property broker for the sale of an old house
Why is this the correct answer?
The commission paid to a property broker is payment for a brokerage service supplied during the current year, so that service contributes to current GDP. The old house itself was produced in an earlier period; its resale merely transfers ownership and does not add the house's full value again. A company's share repurchase and the purchase of government bonds are financial transactions, not purchases of current goods or services. Thus, only the current brokerage service among the options is included.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Methods of calculating national income - Expenditure Method.
