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Question
Read the following statements carefully:
Statement 1: Gross Domestic Product (GDP) is the sum total of the gross market value of all the final goods and services added by all the sectors in the economy during a fiscal year.
Statement 2: Gross Value Added at Market Price (GVAMP) is equal to the excess of value of output over intermediate consumption.
In the light of the given statements, choose the correct alternative from the following.
Options
Statement 1 is true and Statement 2 is false.
Statement 1 is false and Statement 2 is true.
Both Statements 1 and 2 are true.
Both Statements 1 and 2 are false.
Solution
Both Statements 1 and 2 are true.
Explanation:
Gross Domestic Product (GDP) is the sum of market value of all the final goods and services produced in the domestic boundary of a country in an accounting year.
And GVAMP = Value of Output − Intermediate consumption
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RELATED QUESTIONS
Calculate 'sales' from the following data:-
| S. No. | Particulars | (Rs in laths) |
| (i) | Net value added at factor cost | 560 |
| (ii) | Depreciation | 60 |
| (iii) | Change in stock | (-)30 |
| (iv) | Intermediate cost | 1000 |
| (v) | Exports | 200 |
| (vi) | Indirect taxes | 60 |
If Real GDP is Rs 200 and Price Index (with base = 100) is 110, calculate Nominal GDP
If the Nominal GDP is Rs. 1200 and Price Index (with base = 100) is 120, calculate Real GDP.
Calculate 'Net Domestic Product at Market Price' and 'Gross National Disposable Income':
| (Rs crores) | ||
| 1 | Private final consumption expenditure | 400 |
| 2 | Opening stock | 10 |
| 3 | Consumption of fixed capital | 25 |
| 4 | Imports | 15 |
| 5 | Government final consumption expenditure | 90 |
| 6 | Net current transfers to rest of the world | 5 |
| 7 | Gross domestic fixed capital formation | 80 |
| 8 | Closing stock | 20 |
| 9 | Exports | 10 |
| 10 | Net factor income to abroad | (-)5 |
If the Real Gross Domestic Product is Rs 250 and the Price Index (base = 100) is 120, calculate the Nominal Gross Domestic Product.
Calculate ‘net national product’ at factor cost and 'private income' from the following:
| (Rs Arab) | ||
| 1 | National debt interest | 60 |
| 2 | Wages and salaries | 600 |
| 3 | Net current transfers to abroad | 20 |
| 4 | Rent | 200 |
| 5 | Transfer payments by the government | 70 |
| 6 | Interest | 300 |
| 7 | A net domestic product at factor cost accruing to government | 140 |
| 8 | Social security contributions by employers | 100 |
| 9 | Net factor income paid to abroad | 50 |
| 10 | Profits | 300 |
Explain how ‘distribution of gross domestic product’ is a limitation in taking gross domestic product as an index of welfare.
Given the following data, find the values of "Gross Domestic Capital Formation" and "Operating Surplus".
| S. No. | Particulars |
Amount (₹ in crores) |
| (i) | National Income | 22,100 |
| (ii) | Wages and Salaries | 12,000 |
| (iii) | Private Final Consumption Expenditure | 7,200 |
| (iv) | Net Indirect Taxes | 700 |
| (v) | Gross Domestic Capital Formation | ? |
| (vi) | Depreciation | 500 |
| (vii) | Government Final Consumption Expenditure | 6,100 |
| (viii) | Mixed Income of Self-Employed | 4,800 |
| (ix) | Operating Surplus | ? |
| (x) | Net Exports | 3,400 |
| (xi) | Rent | 1,200 |
| (xii) | (-) | |
| Net Factor Income From Abroad | 150 |
NDPFC = ____________.
NDPFC =?
Which of the following statements are correct
Statement 1: The wealth of a country can be increased with the efforts of a healthy workforce.
Statement 2: Investment in the health sector increases the efficiency and productivity of a nation's workforce.
Statement 3: In contrast to an unhealthy person, a healthy person can work better with more efficiency and consequently, can contribute relatively more to the GDP of the country
Which of the following are the limitations of using GDP as an index of the welfare of a country?
Growth of GDP and Major Sectors (in %)
| Column I | Column II |
| (1) Feature of Perfect Competition | (a) Only one buyer |
| (2) Feature of the Monopoly Market | (b) Only a few sellers |
| (3) Features of Monopolistic Competition | (c) a Large Number of Buyers and Sellers |
| (4) Features of the Monopoly Market | (d) Only a few buyers |
Identify the correct pair as given in Column B by matching them with respective concepts in Column A:
| Column A | Column B | ||
| (1) | Reduction in the value of the domestic currency by the government | (a) | Devaluation |
| (2) | Reduction in the value of the domestic currency through market forces | (b) | Appreciation |
| (3) | Increase in the value of the domestic currency by the government | (c) | Depreciation |
| (4) | Increase in the value of the domestic currency through market forces | (d) | Revaluation |
______ is shown by Nominal GDP.
Real GDP is considered as an index of:
Identify the correctly matched items in Column A to that of Column B:
| Column A | Column B | ||
| 1 | GDP of a country | (a) | Absolute measure of welfare |
| 2 | Underestimation of GDP | (b) | Non-monetary exchanges excluded |
| 3 | Base year | (c) | Year of current market prices |
| 4 | Economic Welfare | (d) | Mental satisfaction and peace |
Read the below case and answer the question that follows:
|
The country's real gross domestic product (GDP) is likely to expand by 11 percent in the next financial year due to a faster economic recovery and on a low base, says a report. The report by domestic rating agency Brickwork Ratings said economic activities are slowly reaching PRE-COVID levels following the relaxation of the lockdown, except in sectors that remain affected by social distancing norms. "With progress in developing an effective vaccine for COVID-19 and signals of faster-than-expected recovery in the domestic economy, and also supported by a low base, we expect the real GDP to grow at 11 percent in F/Y 22, from the estimated contraction of 7 percent to 7.5 percent in F/Y 21," the agency said. According to the first advance estimates of national income released by the National Statistical Office (NSO), the country's GDP is estimated to contract by a record 7.7 percent during the current financial year. |
Read the following statements - Assertion (A) and Reason (R).
Assertion (A): Real GDP is the true indicator of the growth of the economy.
Reason (R): Real GDP is nominal GDP adjusted for inflation used to measure the actual growth of production.
Suppose in a hypothetical economy there are only two Firms A and B, Firm A sold goods for ₹ 2,000 to Firm B and purchased goods for ₹ 1,000. Firm B exported goods for ₹ 2,500 and had domestic sales of ₹ 1,500. Calculate Net Domestic Product at market price, if consumption of fixed capital is ₹ 200.
