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Economics · 2022 · 2 marks
National Income AccountingCircular Flow of Income and Methods of Calculating National Income2 marksRemembervery short answer
CBSE 2022 · Region 2 · Set 3 · Q5
(a) State any two precautions to be adopted while estimating National Income by Value Added Method.
(a)
State any two precautions to be adopted while estimating National Income by Value Added Method.
OR
(b)
State any two precautions to be adopted while estimating National Income by Income Method.
Marking-scheme solution
Two precautions regarding value-added method :
(i)
Value of intermediate goods is not included in the estimation of National Income to avoid problem of double counting.
(ii)
Imputed value of production for self-consumption is taken into account while estimating National Income, as it adds to current flow of goods and services.
Two precautions to be taken while estimating National Income are :
(i)
Income from sale of shares is not included as such transactions are mere paper claims and do not lead to value addition. (There is no corresponding flow of goods and services)
(ii)
Windfall gains will not be included as there is no corresponding flow of goods and services.
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CBSE Class 12 Economics past-paper question from the 2022 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.