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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 5 · Set 1 · Q11
(a) State the steps pertaining to the estimation of National Income, under the Income Method.
State the steps pertaining to the estimation of National Income, under the Income 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 Income method:
1. Identify and classify production units into distinct heads namely primary, secondary and tertiary sector.
2. Estimate and classify the factor income in different categories as Compensation of Employees, Operating Surplus and Mixed Income. The sum of factor income represents the contribution of the sectors to Domestic Income (NDP$\displaystyle _{FC}$).
3. Finally, estimate and add the value of Net Factor Income from Abroad (NFIA) to arrive at National Income (NNP$\displaystyle _{FC}$).
Percentage change in Real Gross Domestic Product (GDP) in the year $\displaystyle 2022$-$\displaystyle 23$
= $\displaystyle \dfrac{\text{Change in Real GDP}}{\text{Real GDP}}$ x $\displaystyle 100$
= $\displaystyle \dfrac{6000 - 5000}{5000}$ x $\displaystyle 100$
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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.