Question

In the question given below, there are two statements marked as Assertion (A) and Reason

(R). Read the statements and chose the correct option:

Assertion (A): Not every good or service that is produced and sold needs to be counted to

know the total production in each sector.

Reason (R): The value of final goods already includes the value of all the intermediate goods.

Options:

a. Both A and R are true and R is the correct explanation of A.

b. Both A and R are true but R is not the correct explanation of A.

c. A is correct but R is wrong.

d. A is wrong but R is correct.​

Answer 1

Answer:

both R and A are true and R is correct explanation of A

Answer 2

Both A and R are true and R is the correct explanation of A.  

'Not every good or service that is produced and sold needs to be counted to  know the 'total production' in each sector. 'The value of final goods already includes the 'value of all the 'intermediate goods.'

Option (i)

Explanation:

• For example, a Cultivator sells wheat to the flour mill at Rs 8 per kg. The mill granulates the wheat and sells the flour to a biscuit manufacturing agency for Rs 10 per kg.
• The biscuit company uses ingredients such as flour, sugar, and oil to make 5 packets of biscuits. These biscuits are sold at a price of Rs 100 (Rs 20 per biscuit) to the customers.
• Only the biscuit is considered as final goods because they reach the final consumers. Wheat is considered as an intermediate product.
• It is used in the manufacture of final goods only. The value of final products already covers the value of all the middle products that were used in the manufactured of final goods.