✓ Board-verified
Economics · 2025 · 3 marks
National Income AccountingCircular Flow of Income and Methods of Calculating National Income3 marksApplyshort answer
CBSE 2025 · Region 5 · Set 3 · Q12
State the steps pertaining to the estimation of National Income, under the Value Added Method.On the basis of the following hypothetical data, calculate the percentage change in Real Gross Domestic Product (GDP) in the year $\displaystyle 2022$ – $\displaystyle 23$, using $\displaystyle 2020$ – $\displaystyle 21$ as the base year.(All figures in ₹ crore)Year Nominal GDP Nominal GDP (Adjusted to Base Year Price) $\displaystyle 2020$ – $\displaystyle 21$ $\displaystyle 3,000$ $\displaystyle 5,000$ $\displaystyle 2022$ – $\displaystyle 23$ $\displaystyle 4,000$ $\displaystyle 6,000$
State the steps pertaining to the estimation of National Income, under the Value Added Method.
On the basis of the following hypothetical data, calculate the percentage change in Real Gross Domestic Product (GDP) in the year $\displaystyle 2022$ – $\displaystyle 23$, using $\displaystyle 2020$ – $\displaystyle 21$ as the base year.
(All figures in ₹ crore)
| Year | Nominal GDP | Nominal GDP (Adjusted to Base Year Price) |
| $\displaystyle 2020$ – $\displaystyle 21$ | $\displaystyle 3,000$ | $\displaystyle 5,000$ |
| $\displaystyle 2022$ – $\displaystyle 23$ | $\displaystyle 4,000$ | $\displaystyle 6,000$ |
Marking-scheme solution
Steps pertaining to the estimation of National Income under the Value Added method:
1. Identify and classify production units into distinct heads namely primary, secondary, and tertiary sector.
2. Estimate the Gross Value Added of each sector by subtracting the value of Intermediate Consumption from the Value of Output and add Gross Value Added of each sector to arrive at Gross Domestic Product at Market Price.
3. Finally, estimate and deduct the value of Depreciation, Net Indirect Taxes and add Net Factor Income from Abroad to arrive at National Income (NNP$\displaystyle _{FC}$).
Percentage change in Real Gross Domestic Product (GDP) in the year $\displaystyle 2022$-$\displaystyle 23$
$$= \frac{\textbf{Change in Real GDP}}{\textbf{Real GDP}} \times 100$$
$$= \frac{6000-5000}{5000} \times 100$$
More from National Income Accounting
- To arrive at the value of Net Value Added at Market Price (NVA MP ), must be to/from Gross Value Added at…2025 · asked 3×
- Income generated from Aircrafts of Air India operating between Canada and England would be added to the…2026 · asked 3×
- Read the following passage carefully: The domestic product measures the value of all goods and services…2026 · asked 3×
- Read the following statements carefully: Statement I: Positive externalities refer to the benefits a firm/an…2026 · asked 3×
- Following are the steps to measure National Income (NNP FC ) by Value Added method: (i) Calculate Domestic…2026 · asked 3×
- Read the following Flow chart carefully and choose the correct option:2026 · asked 3×
- Read the following statements carefully: Statement 1: Final goods are those goods which normally lose their…2026 · asked 3×
- (i) Suppose, there are only three firms in a hypothetical economy, viz. A, B and C. During a given period of…2025 · asked 3×
CBSE Class 12 Economics past-paper question from the 2025board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.