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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 3 · Q11
(a) State and explain any two precautions that must be taken while estimating national income by production method/output method.
State and explain any two precautions that must be taken while estimating national income by production method/output 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 Production Method are:
Value of intermediate goods: It should not be included as it will lead to the problem of double counting.
Sale and 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.