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Economics · 2025 · 3 marks
National Income AccountingCircular Flow of Income and Methods of Calculating National Income3 marksApplyshort answer
CBSE 2025 · Region 7 · Set 2 · Q11
(a) State and explain any two precautions that must be taken while estimating national income by expenditure method.
State and explain any two precautions that must be taken while estimating national income by expenditure method.
Calculate the value of ‘Sales’ from the following data :
| S. No. | Particulars | Amount (in ₹ lakh) |
| (i) | Subsidies | $\displaystyle 300$ |
| (ii) | Operating surplus | $\displaystyle 600$ |
| (iii) | Opening stock | $\displaystyle 120$ |
| (iv) | Closing stock | $\displaystyle 520$ |
| (v) | Intermediate consumption | $\displaystyle 2,900$ |
| (vi) | Consumption of fixed capital | $\displaystyle 600$ |
| (vii) | Profits | $\displaystyle 700$ |
| (viii) | Net Value Added at Factor Cost (NVA$\displaystyle _{FC}$) | $\displaystyle 2,200$ |
Marking-scheme solution
Two precautions to be taken while estimating National Income by Expenditure Method are:
Expenditure on intermediate goods: It should not be included as it will lead to the problem of double counting.
Expenditure on purchase of second-hand goods: It should not be included as it does not add to the flow of goods and services in the current year.
Value of Sales = (viii) – (iv) + (iii) + (v) + (vi) – (i)
= $\displaystyle 2,200$ – $\displaystyle 520$ + $\displaystyle 120$ + $\displaystyle 2,900$ + $\displaystyle 600$ – $\displaystyle 300$
= ₹ $\displaystyle 5,000$ lakh
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CBSE Class 12 Economics past-paper question from the 2025 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.