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Economics · 2026 · 4 marks
National Income AccountingCircular Flow of Income and Methods of Calculating National Income4 marksApplyshort answer
CBSE 2026 · Region 1 · Set 1 · Q13
(A) For a hypothetical economy, assuming there are only two firms (X and Y) with equal values of Gross Value Added (GVA). On the basis of the…
For a hypothetical economy, assuming there are only two firms (X and Y) with equal values of Gross Value Added (GVA).
On the basis of the following data, estimate the value of Domestic Sales of both the firms (X and Y) :
| S. No. | Items | Amount (in ₹ crore) |
| (i) | Value of Output of firm Y | $\displaystyle 700$ |
| (ii) | Purchases by firm X from firm Y | $\displaystyle 200$ |
| (iii) | Exports by firm X | $\displaystyle 100$ |
| (iv) | Purchases by firm Y from firm X | $\displaystyle 150$ |
| (v) | Additions to Stock of firm X | $\displaystyle 50$ |
Ms. Reeta D'Costa, retired from the post of Income Tax Commissioner in the year 2023.
Apart from her pension, she also receives the following from various sources :
Rental income from a flat she owns.
Interest income from her fixed deposits.
Money sent by her children settled abroad.
Identify and classify, her monthly incomes into 'factor income' and 'transfer income', with valid reasons.
Marking-scheme solution
(A)Gross Value Added of Firm Y = (i) – (iv)= $\displaystyle 700$ – $\displaystyle 150$= ₹ $\displaystyle 550$ croreDomestic Sales of Firm Y = Gross Value Added of Firm Y + (iv)= $\displaystyle 550$ + $\displaystyle 150$= ₹ $\displaystyle 700$ croreGross Value Added of Firm X = Gross Value Added of Firm Y = ₹ $\displaystyle 550$ croreDomestic Sales of Firm X = Gross Value Added of Firm X – (iii) – (v) + (ii)= $\displaystyle 550$ – $\displaystyle 100$ – $\displaystyle 50$ + $\displaystyle 200$= ₹ $\displaystyle 600$ crore(B)Factor Income:
Rental income from a flat she owns.
Interest income from her fixed deposits.
Retirement pension (Deferred Payment)
Transfer Income:Money sent by her children settled abroad.
Factor income is the income earned by the factors of production for rendering their services.Transfer income is the income received without rendering any productive service in return.More from National Income Accounting
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CBSE Class 12 Economics past-paper question from the 2026 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.