Question

Calculate Gross Domestic Product at Market Price by
(a) Production Method and (b) Income Method
ITEMS Rs.(in Crores )
Intermediate consumption by
Primary sector …………………….500
Secondary sector………………….. 400
iii) Tertiary sector………………………40
b. Value of output by
i) Primary sector ………………………….1000
ii) Secondary sector………………………..900
iii) Tertiary sector …………………………700
c. Rent…………………………………………… 10
d. Compensation of employees ………………….400
e. Mixed income ……………………………….. 550
f. Operating surplus ……………………………..300
g. Net factor income from abroa………………..(-)20
h. Interest ……………………………………….5
i. Consumption of fixed capital …………………..40
j. Net indirect taxes ……………………………… 10​

Answer 1

PRODUCTION METHOD-

The expenditures approach says GDP = consumption + investment + government expenditure + exports – imports. The income approach sums the factor incomes to the factors of production. The output approach is also called the “net product” or “value added” approach.

INCOME METHOD-

The expenditures approach says GDP = consumption + investment + government expenditure + exports – imports. The income approach sums the factor incomes to the factors of production. The output approach is also called the “net product” or “value added” approach.