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Multiple Choice Questions
On reaching 65 years, a builder earning $30,000 per annum, sells his firm for $200,000 but stays on as a consultant for a fee of $8,000 per year. He
receives an annual occupational pension of $9,000. One of two assistants, each earning $12,000, loses his job and is not eligible for state benefits. As
a result national income:
Briser by S175,000
Orises by S165,000
Cfalls by $25,000
falls by $34.000
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As a result of the above transactions and using the national income formula, the national income A. rises by $175,000.

Calculating National Income

The formula for calculating the national income here is Rent + Wages + Interest + Profit + Mixed-Income.

Data and Calculations:

Lost annual wages = $30,000

Profit from sale of firm = $200,000

Consultant fee (mixed income) = $8,000

Occupational pension (mixed income) = $9,000

Assistant's wages lost = $12,000

$0+ -$30,000 -$12,000 + $0 + $200,000 + $8,000 + $9,000

= -$42,000 + $217,000

National income = $175,000

Thus, as a result of the above transactions and using the national income formula, the national income A. rises by $175,000.

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