Answer to Question #120847 in Macroeconomics for Sakshi

Question

Manish buys a second hand car from a car broker for Rs. 3,25,000.The broker receives Rs. 16,500 as commission for his services from manish. How will this transaction affect the national income of the country?

Answer 1

National income is the money value of all goods and services produced in a country during a financial year. The commission of Rs. 16,500 received by the broker and the remaining amount received by the owner of the car (Rs. 308, 500), will lead to an increase in the national income because it is assumed that the commission is an income to the broker. Thus, any income received is among the major classes contributing to the national income of a country.