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Consider the following statements :
Statement I : There are two different methods to calculate GDP in India, i.e., output and expenditure methods, whose values will not be the same practically.
Statement II : Externalities will affect the GDP calculation leading to underestimation or overestimation of the actual welfare of the economy.
Choose the correct answer using the codes given below :
Statement I : There are two different methods to calculate GDP in India, i.e., output and expenditure methods, whose values will not be the same practically.
Statement II : Externalities will affect the GDP calculation leading to underestimation or overestimation of the actual welfare of the economy.
Choose the correct answer using the codes given below :
- a)Both Statement I and Statement II are individually true and Statement II is the correct explanation of Statement I
- b)Both Statement I and Statement II are individually true but Statement II is not the correct explanation of Statement I
- c)Statement I is true but Statement II is false
- d)Statement I is false but Statement II is tru
Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements :Statement I : There are two differe...
- The methodology of GDP Calculation is give by National Statistical Office (NSO). NSO calculates GDP by Value Added Method (or) Output method and Expenditure Method. Under Value Added Method, it calculates the value addition done by various economic activities viz:
- Agriculture, Forestry and Fishing
- Mining and Quarrying
- Manufacturing.
- Electricity, Gas, water supply and other utility services.
- Construction.
- Trade, Hotels and transport, and communication and services related to broadcasting. 3⁄4 Financial, Insurance, real estate and professional service
- Public administration and defence and other services. Under Expenditure Method, it adds up the various components of expenditure viz:
- Private Final Consumption Expenditure (it is basically household expenditure)
- Government Final Consumption Expenditure.
- Gross Fixed Capital Formation (Investment expenditure of private and government
- Net of Exports and Imports. Though GDP measured from either side should be equal, since reliable data is not available for private consumption expenditure, there is always a difference in the two ways of measuring GDP but the values estimated in both the methods of GDP calculation are the same. So, Statement I is correct. Externalities refer to the benefits (or harms) a firm or an individual cause to another for which they are not paid (or penalized). Externalities do not have any market in which they can be bought and sold. For Example, There is a manufacturing industry named ABC Company. The Company produces certain products but in the process of production it is generating certain waste materials (chemicals) which are getting dumped in the nearby river. The products produced by the factory will be counted as part of the country's GDP. But dumping of waste in the river may cause harm to the people who use water of the river and their well-being will fall. Pollution may also kill fish or other organisms of the river on which fish survive. As a result, the fishermen of the river may be losing their livelihood. Such harmful effects that the refinery is inflicting on others, for which it will not bear any cost, are called externalities. Externalities can be a Positive externalities or Negative externalities. if we take GDP as a measure of welfare of the economy, we shall be overestimating the actual welfare. This is an example of negative externality. There can be cases of positive externalities as well. In such cases GDP will underestimate the actual welfare of the economy. So, Statement II is correct.
- While Externalities affect the GDP Calculation, the two methods, that is, the Output and Expenditure method may vary as one part is calculated in GDP estimation (the producer manufacturing the products), and it affects only the welfare of the economy. Though externalities include calculating GDP, it does not affect the values calculated in GDP. Thus, Both Statement I and Statement II are individually true but Statement II is not the correct explanation of Statement I. So, Option (b) is correct.
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Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer?
Question Description
Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer?.
Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer?.
Solutions for Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
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Here you can find the meaning of Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer?, a detailed solution for Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer? has been provided alongside types of Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Consider the following statements :Statement I : There are two different methods to calculate GDP in India, i.e., output andexpenditure methods, whose values will not be the same practically.Statement II : Externalities will affect the GDP calculation leading to underestimation oroverestimation of the actual welfare of the economy.Choose the correct answer using the codes given below :a)Both Statement I and Statement II are individually true and Statement II is the correctexplanation of Statement Ib)Both Statement I and Statement II are individually true but Statement II is not thecorrect explanation of Statement Ic)Statement I is true but Statement II is falsed)Statement I is false but Statement II is truCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice UPSC tests.
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