CBSE 2025, Set 2

Question

(b) (i) On the basis of the given data, estimate the value of Net Domestic Product at Factor Cost ($NDP_{FC}$):

| S.No. | Items | Amount (in Crore) | |---|---|---| | (i) | Household Consumption Expenditure | 1,800 | | (ii) | Gross Business Fixed Capital Formation | 1,150 | | (iii) | Gross Residential Construction Expenditure | 1,020 | | (iv) | Government Final Consumption Expenditure | 2,170 | | (v) | Excess of Imports over Exports | 720 | | (vi) | Inventory Investments | 540 | | (vii) | Gross Public Investments | 1,300 | | (viii) | Net Indirect Taxes | 240 | | (ix) | Net Factor Income from Abroad | (-) 250 | | (x) | Consumption of Fixed Capital | 440 |
(ii) "All consumption goods are durable in nature."
Defend or refute the given statement with a valid argument.

Edvaya · Accepted Answer

The correct answer is Subjective. **(i) Estimation of $NDP_{FC}$:** Net Domestic Product at Factor Cost ($NDP_{FC}$) = (i) Household Consumption Expenditure + (iv) Government Final Consumption Expenditure + [(ii) Gross Business Fixed Capital Formation + (iii) Gross Residential Construction Expenditure + (vii) Gross Public Investments + (vi) Inventory Investments] - (v) Excess of Imports over Exports - (x) Consumption of Fixed Capital - (viii) Net Indirect Taxes $NDP_{FC} = 1,800 + 2,170 + 1,150 + 1,020 + 1,300 + 540 - 720 - 440 - 240$ $= 	ext{₹ } 6,580 	ext{ crore}$ **(ii) Defend or Refute:** The given statement is **refuted**. Consumption goods can be categorised as durable and non-durable. Non-durable consumption goods, such as food or milk, have a shorter lifespan and are consumed in a single act. Whereas durable consumption goods, like cars and home appliances, can be used over an extended period usually more than one year. Hence, not all consumption goods are durable in nature.

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Economics > Introductory Macroeconomics > National Income Aggregates

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S.No.	Items	Amount (in Crore)
(i)	Household Consumption Expenditure	1,800
(ii)	Gross Business Fixed Capital Formation	1,150
(iii)	Gross Residential Construction Expenditure	1,020
(iv)	Government Final Consumption Expenditure	2,170
(v)	Excess of Imports over Exports	720
(vi)	Inventory Investments	540
(vii)	Gross Public Investments	1,300
(viii)	Net Indirect Taxes	240
(ix)	Net Factor Income from Abroad	(-) 250
(x)	Consumption of Fixed Capital	440