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In an economy, exclusion of… (Class 12 Economics 2026, Q5)

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EconomicsCBSE Class 12 · Board exam 2026, set 58/1/1 · 1 mark · MCQ

CBSE Class 12 Economics 2026: question 5

Set in the CBSE Class 12 board exam of 2026, paper 58/1/1, section A, question 5, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q5 · 1 mark · MCQNational Income Accounting

In an economy, exclusion of ___________ may lead to under estimation of the value of Gross Domestic Product (GDP). (Choose the correct option to fill in the blank)

(i) Barter Transactions
(ii) Services provided by family members
(iii) Illegal activities
(iv) Depreciation of Assets

  1. (A)(i) and (ii)
  2. (B)(ii) and (iii)
  3. (C)(iii) and (iv)
  4. (D)(i), (ii) and (iii)

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 58/1/1.

Hints

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

Hint 1

Which items are genuine production that escape market valuation?

Hint 2

Underestimation means real production is left out.

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. Barter transactions and the services of family members (housework, caring for children) are productive activities, but they do not pass through the market, so they are left out of GDP even though output is produced.

  2. Leaving them out makes GDP smaller than the true value of production, i.e. underestimates it. Illegal activities are not counted as production, and depreciation is not part of the output being estimated, so (iii) and (iv) do not fit. Option (A).

    1 mark

Answer: (A) (i) and (ii)

Where the marks are

  • Non-market production (barter, family services) leads to underestimation (1 mark)

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 paper2026 board paper, set 58/1/1: 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.