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Economics · 2022 · 5 marks
National Income AccountingCircular Flow of Income and Methods of Calculating National Income5 marksApplylong answer
CBSE 2022 · Region 5 · Set 3 · Q12
(I)From the following, calculate the value of net domestic product at factor cost :S. No. Items Amount in (₹ crore) (i) Royalty $\displaystyle 5$ (ii) Rent $\displaystyle 75$ (iii) Interest $\displaystyle 30$ (iv) Compensation of Employees $\displaystyle 600$ (v) Profit $\displaystyle 45$ (vi) Dividends $\displaystyle 20$ (vii) Mixed Income of self employed $\displaystyle 100$
(II)Distinguish between final goods and inter mediate goods.(I)From the following data, calculate the value of compensation of employees (COE) :S. No. Items Amount in (₹ crore) (i) Old age pension $\displaystyle 2,000$ (ii) Wages and salaries in cash $\displaystyle 60,000$ (iii) Rent free accommodation to employees $\displaystyle 30,000$ (iv) Employer's contribution to provident fund $\displaystyle 7,500$ (v) Payment of life insurance premium by the employees $\displaystyle 2,500$ (vi) Contribution to provident fund by employees $\displaystyle 35,000$
(II)Distinguish between 'Fixed Investment' and 'Inventory Investment'.
(I)
From the following, calculate the value of net domestic product at factor cost :
| S. No. | Items | Amount in (₹ crore) |
| (i) | Royalty | $\displaystyle 5$ |
| (ii) | Rent | $\displaystyle 75$ |
| (iii) | Interest | $\displaystyle 30$ |
| (iv) | Compensation of Employees | $\displaystyle 600$ |
| (v) | Profit | $\displaystyle 45$ |
| (vi) | Dividends | $\displaystyle 20$ |
| (vii) | Mixed Income of self employed | $\displaystyle 100$ |
(II)
Distinguish between final goods and inter mediate goods.
(I)
From the following data, calculate the value of compensation of employees (COE) :
| S. No. | Items | Amount in (₹ crore) |
| (i) | Old age pension | $\displaystyle 2,000$ |
| (ii) | Wages and salaries in cash | $\displaystyle 60,000$ |
| (iii) | Rent free accommodation to employees | $\displaystyle 30,000$ |
| (iv) | Employer's contribution to provident fund | $\displaystyle 7,500$ |
| (v) | Payment of life insurance premium by the employees | $\displaystyle 2,500$ |
| (vi) | Contribution to provident fund by employees | $\displaystyle 35,000$ |
(II)
Distinguish between 'Fixed Investment' and 'Inventory Investment'.
Marking-scheme solution
(I)
Net Domestic Product at Factor Cost = (iv) + (ii) + (i) + (iii) + (v) + (vii)
= $\displaystyle 600$ + $\displaystyle 75$ + $\displaystyle 5$ + $\displaystyle 30$ + $\displaystyle 45$ + $\displaystyle 100$
= ₹ $\displaystyle 855$ crore
(II)
Final goods are those goods which are used either for consumption or investment purpose by the end user.
Intermediate goods refer to those goods which are completely used up during the production process of other goods.
(I)
Compensation of Employees (COE) = (ii) + (iii) + (iv)
= $\displaystyle 60,000$ + $\displaystyle 30,000$ + $\displaystyle 7,500$
= ₹ $\displaystyle 97,500$ crore
(II)
Fixed investment refers to addition to the stock of fixed assets in the hands of producers during an accounting year.
Whereas, inventory investment is addition to the stock of inventory (unsold finished goods, semi-finished goods, raw material) with the producers during an accounting year.
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CBSE Class 12 Economics past-paper question from the 2022board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.