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| 1. |
(a) State any twoprecautionsthat must be taken into considerationwhile estimatingnationalby value added method. (b) In an economy, following transactionstook place. Calculatevalue of output and value added by Firm B : (i) Firm A sold to firmB goods of Rs. 80 core, to firm C Rs. 50 crore, to household Rs. 30 crore and goods of value Rs. 10 crore remain unsold. (ii) Firm B sold to firm C goods of Rs. 70 crore, to firm D Rs. 40 crore, goods of value Rs. 30 crore were exported and goods of value Rs. 5 crore was sold to government . |
| Answer» <html><body><p></p>Solution :(a) Precautions of value added method are :<br/> (i) Value of sale and purchase of second hand goods is not <a href="https://interviewquestions.tuteehub.com/tag/considered-7257760" style="font-weight:bold;" target="_blank" title="Click to know more about CONSIDERED">CONSIDERED</a> while estimatingvalue added as the value of second hand goods is already accountedduring the year theywere <a href="https://interviewquestions.tuteehub.com/tag/produced-592947" style="font-weight:bold;" target="_blank" title="Click to know more about PRODUCED">PRODUCED</a>. <br/> (ii) Value of intermediate goodsis not included in the estimationof value added because value of intermediate goods is reflectedin the value of final goods.<br/> (b) Value of output of firm B = <a href="https://interviewquestions.tuteehub.com/tag/sales-25569" style="font-weight:bold;" target="_blank" title="Click to know more about SALES">SALES</a> of firm B to firm +Sales of firm B to firm D + Exports + Sales of firm B to Government <br/> `=70+40+30+5` <br/> = Rs. 145 crores <br/> Value Added by Firm B = Value of output by Firm B - Purchases by Firm B from firm A <br/> = 145-80 <br/> = Rs. <a href="https://interviewquestions.tuteehub.com/tag/65-331005" style="font-weight:bold;" target="_blank" title="Click to know more about 65">65</a> Crore</body></html> | |