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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 2 · Q13
(A) 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…
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.
For a hypothetical economy, assuming there are only two firm (X and Y) with equal values of Gross Value Added (GVA).
On the basis of the following data, estimate the values of Domestic Sales by firm X :
| S. No. | Items | Amount (in ₹ crore) |
| (i) | Value of Output of firm Y | $\displaystyle 1,400$ |
| (ii) | Purchases by firm X from firm Y | $\displaystyle 400$ |
| (iii) | Exports by firm X | $\displaystyle 200$ |
| (iv) | Purchases by firm Y from firm X | $\displaystyle 300$ |
| (v) | Additions to Stock of firm X | $\displaystyle 100$ |
| (vi) | Consumption of fixed capital | $\displaystyle 100$ |
Marking-scheme solution
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.
Gross Value Added of Firm Y = (i) – (iv)
= $\displaystyle 1,400$ – $\displaystyle 300$
= ₹ $\displaystyle 1,100$ crore
Gross Value Added of Firm Y = Gross Value Added of Firm X = ₹ $\displaystyle 1,100$ crore
Domestic Sales of Firm X = Gross Value Added of Firm X – (iii) – (v) + (ii)
= $\displaystyle 1,100$ – $\displaystyle 200$ – $\displaystyle 100$ + $\displaystyle 400$
= ₹ $\displaystyle 1,200$ crore
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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.