NextQ74

Meera and Shahid are two classmates, who were comparing India's economic growth over the years. Meera referred to the increase in Gross Domestic Product (GDP) at current prices prevailing in market, while Sahid insisted on considering GDP after adjusting for inflation. Their debate on which of the two measures gives a true picture of people's well-being, remained inconclusive. Considering the above mentioned situation, elaborate with valid reason, which of the two variables is considered a better indicator of welfare and why ? Two friends, Ravi and Harry were discussing whether the money received from sale of an old car should be included in India's National income. Ravi was of the view that it should be included in India's National income while Harry did not agree with him. They also had difference of opinion on the treatment of brokerage paid to the car dealer. As their Economics teacher, state the treatments with valid arguments.

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Question 73

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

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