Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Why is the brokerage paid to the broker during the sale and purchase of shares is included in national income?

Options:

Because we include this in operating surplus

Because sale and purchase of shares is added

Because brokerage adds to the corresponding flow of goods and service 

Brokerage paid to the broker during the sale and purchase of shares is included in national income

Correct Answer:

Because brokerage adds to the corresponding flow of goods and service 

Explanation:

The correct answer is option 3: Because brokerage adds to the corresponding flow of goods and service

Sale of shares itself is not included while calculating the national income.

However, the services rendered by the broker is productive in nature i.e. they add to the flow of goods and services in the economy. Brokerage fees are considered part of the service sector and contribute to the national income as they represent payment for the service provided by the broker. Thus, we include it while calculating the national income.