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Economics · 2026 · 3 marks
CBSE 2026 · Region 1 · Set 1 · Q11
Meera and Shahid are two classmates, who were comparing India's economic growth over the years.Meera referred to the increase in Gross Domestic Product (GDP) at current prices prevailing in market, while Sahid insisted on considering GDP after adjusting for inflation. Their debate on which of the two measures gives a true picture of people's well-being, remained inconclusive.Considering the above mentioned situation, elaborate with valid reason, which of the two variables is considered a better indicator of welfare and why ?Two friends, Ravi and Harry were discussing whether the money received from sale of an old car should be included in India's National income.Ravi was of the view that it should be included in India's National income while Harry did not agree with him.They also had difference of opinion on the treatment of brokerage paid to the car dealer.As their Economics teacher, state the treatments with valid arguments.
Meera and Shahid are two classmates, who were comparing India's economic growth over the years.
Meera referred to the increase in Gross Domestic Product (GDP) at current prices prevailing in market, while Sahid insisted on considering GDP after adjusting for inflation. Their debate on which of the two measures gives a true picture of people's well-being, remained inconclusive.
Considering the above mentioned situation, elaborate with valid reason, which of the two variables is considered a better indicator of welfare and why ?
Two friends, Ravi and Harry were discussing whether the money received from sale of an old car should be included in India's National income.
Ravi was of the view that it should be included in India's National income while Harry did not agree with him.
They also had difference of opinion on the treatment of brokerage paid to the car dealer.
As their Economics teacher, state the treatments with valid arguments.
Marking-scheme solution
(A) Gross Domestic Product (GDP) after adjusting for inflation (Real GDP) is a better measure of welfare than GDP at current prices (Nominal GDP).Real GDP is a true indicator of economic growth of a country as it changes only with the change in physical output. Thus, it eliminates the effect of changes in prices, showing the real growth of the economy.In contrast, Nominal GDP might change with the change in output or/and change in prices.(B) Harry's opinion is correct.The money received from the sale of an old car will not be included in India's National Income because its value was already included in the year it was originally produced. Hence, it does not contribute to the current flow of goods and services.However, the brokerage paid to the car dealer is included in India's National Income, as it represents payment for productive services rendered in the current year.
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CBSE Class 12 Economics past-paper question from the 2026board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.