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Economics · 2024 · 3 marks
National Income AccountingCircular Flow of Income and Methods of Calculating National Income3 marksApplyshort answer
CBSE 2024 · Region 3 · Set 2 · Q12
State any three precautions to be taken while estimating national income by income method.On the basis of the given data, estimate the value of National Income :S.No. Items Amount (in ₹ crore) (i) Government Final Consumption Expenditure $\displaystyle 200$ (ii) Private Final Consumption Expenditure $\displaystyle 300$ (iii) Gross Domestic Fixed Capital Formation $\displaystyle 80$ (iv) Net Exports (–) $\displaystyle 20$ (v) Increase in Stock $\displaystyle 20$ (vi) Consumption of Fixed Capital $\displaystyle 15$ (vii) Indirect Taxes $\displaystyle 60$ (viii) Subsidies $\displaystyle 15$ (ix) Net Factor Income from Abroad (–) $\displaystyle 40$
State any three precautions to be taken while estimating national income by income method.
On the basis of the given data, estimate the value of National Income :
| S.No. | Items | Amount (in ₹ crore) |
| (i) | Government Final Consumption Expenditure | $\displaystyle 200$ |
| (ii) | Private Final Consumption Expenditure | $\displaystyle 300$ |
| (iii) | Gross Domestic Fixed Capital Formation | $\displaystyle 80$ |
| (iv) | Net Exports | (–) $\displaystyle 20$ |
| (v) | Increase in Stock | $\displaystyle 20$ |
| (vi) | Consumption of Fixed Capital | $\displaystyle 15$ |
| (vii) | Indirect Taxes | $\displaystyle 60$ |
| (viii) | Subsidies | $\displaystyle 15$ |
| (ix) | Net Factor Income from Abroad | (–) $\displaystyle 40$ |
Marking-scheme solution
Three precautions to be taken while estimating National Income by Income method are:
Transfer income should not be included.
Windfall gains should not be included.
Income from sale of financial instruments (shares, bonds, debentures etc.) should not be included.
National Income (NNP$\displaystyle _{FC}$) = (ii) + (i) + (iii) + (v) + (iv) − (vi) − {(vii) − (viii)} + (ix)
= $\displaystyle 300$ + $\displaystyle 200$ + $\displaystyle 80$ + $\displaystyle 20$ + (−$\displaystyle 20$) − $\displaystyle 15$ − $\displaystyle 60$ + $\displaystyle 15$ + (−$\displaystyle 40$)
= ₹ $\displaystyle 480$ crore
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CBSE Class 12 Economics past-paper question from the 2024board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.