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Economics · 2023 · 3 marks
National Income AccountingCircular Flow of Income and Methods of Calculating National Income3 marksApplyshort answer
CBSE 2023 · Region 1 · Set 2 · Q11
(a) Distinguish between ‘Value Addition’ and ‘Final Value of Output’.
Distinguish between ‘Value Addition’ and ‘Final Value of Output’.
Find Net Value Added at Factor Cost (NVA$\displaystyle _{FC}$) using the given data :
| S. No. | Particulars | Amount (in ₹ crore) |
| (i) | Sale of rice in the market | $\displaystyle 58$ |
| (ii) | Purchase of tractor and thresher | $\displaystyle 40$ |
| (iii) | Procurement of rice by the government | $\displaystyle 20$ |
| (iv) | Self-consumption of rice during the year | $\displaystyle 15$ |
| (v) | Expenditure on running and maintenance of tractor and thresher | $\displaystyle 20$ |
| (vi) | Fertiliser subsidies received from the government | $\displaystyle 3$ |
Marking-scheme solution
Value Addition refers to the excess of ‘Value of Output’ over the ‘Value of Intermediate Consumption’.
Value Addition = Value of Output – Value of Intermediate Consumption
Whereas;
Final Value of output refers to the total money value of goods and services produced during a given period of time.
Final Value of output = (Number of units produced) x (Price per unit)
Net Value Added at Factor Cost (NVA$\displaystyle _{FC}$) = {(i) + (iii) + (iv)} – (v) + (vi)
= {$\displaystyle 58$ + $\displaystyle 20$ + $\displaystyle 15$} - $\displaystyle 20$ + $\displaystyle 3$
= ₹ $\displaystyle 76$ crore
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CBSE Class 12 Economics past-paper question from the 2023 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.