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Answer the following. (Class 12 Economics SQP 2023-24, Q17)

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EconomicsCBSE Class 12 · Sample paper, session 2023-24 · 6 marks · Long answer

CBSE Class 12 Economics sample paper 2023-24: question 17

From the official CBSE sample question paper for 2023-24, section A, question 17, for 6 marks. Try it first; the hints and our step-by-step solution are below.

Q17 · 6 marks · Long answerCompetency-basedNational Income Accounting

Answer the following.

  1. (a)

    Giving valid reasons, explain how the following would be treated while estimating domestic income?
    (i) Payment made by American tourist for goods purchased in India.
    (ii) Tomatoes grown by Ms. Puja in her kitchen garden.

    3 marks
  2. (b)

    "Machine purchased by a firm is always a capital good." Do you agree with the given statement? Give valid reasons for your answer.

    3 marks

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2023-24.

Hints

Open one hint at a time and try again before the next.

Hint 1

Where were the goods produced, and who bought them?

Hint 2

Was money exchanged for the tomatoes?

Hint 3

What does a machinery dealer do with machines?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. (a)(i) Included in India's domestic income: the American tourist's spending on goods bought in India is treated as an export of India (production within the domestic territory sold to a non-resident).

    1½ marks

  2. (a)(ii) Not included, as treated in the scheme: the market value of tomatoes grown in a kitchen garden is hard to estimate, and they are not grown for any monetary consideration.

    1½ marks

  3. (b) No, I do not agree. Capital goods are final goods that help produce other goods and services over many years.

    1 mark

  4. (b) A machine bought by a firm is a capital good only if it is used in production. If a firm buys it for resale within the year (say, a machinery dealer), it is an intermediate good, not a capital good.

    2 marks

Answer: (a)(i) Included as exports; (ii) not included (market value hard to estimate, no monetary transaction). (b) Disagree: a machine bought for resale is an intermediate good.

Where the marks are

  • Each item with reason (1½ + 1½)
  • Disagreement with reason and example (3)

Revise the chapter

Practise this chapterBoard-style questions from National Income Accounting, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2023-24: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.