Consider the following statements regarding the "GDP" of India: 1. It shows how big the economy is. 2. It is the sum of the value of intermediate goods produced in the three sectors. 3. It excludes the value of goods and services produced by Indians outside the country. Which of the statements given above is/are correct?

The correct option is 1 and 3 only. Explanation Gross Domestic Product (GDP) is the total monetary value of all final goods and services produced within the domestic territory of a country during a specific time period, usually a year. It serves as the primary indicator of the economic size and health of a nation. Statement-wise Analysis: - Statement 1 is Correct: GDP is the standard measure used to quantify the aggregate economic activity of a nation. It reflects the overall size of the economy; for instance, India is often described as a $3 trillion economy based on its nominal GDP. - Statement 2 is Incorrect: GDP is calculated by summing the value of final goods and services only. Intermediate goods (goods used to produce other goods) are excluded to avoid the error of double counting, as the value of intermediate inputs is already included in the final price of the product. - Statement 3 is Correct: GDP is a territorial concept. It measures production taking place strictly within the geographic boundaries of the country. Economic activities performed by Indian nationals abroad are excluded from India's GDP (though they are included in the Gross National Product, or GNP). Key Takeaway: GDP focuses on where production takes place (domestic territory) and counts only final goods, whereas GNP focuses on who produces it (nationals) and includes net factor income from abroad.

NCERT Class 10 Economics — Chapter 2: Sectors of the Indian Economy

mcqmedium

Consider the following statements regarding the "GDP" of India:

It shows how big the economy is.
It is the sum of the value of intermediate goods produced in the three sectors.
It excludes the value of goods and services produced by Indians outside the country.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

A1 and 2 only
B1, 2 and 3
C2 only
D1 and 3 only

Did you get this right?

Solution

The correct option is 1 and 3 only.

Explanation

Gross Domestic Product (GDP) is the total monetary value of all final goods and services produced within the domestic territory of a country during a specific time period, usually a year. It serves as the primary indicator of the economic size and health of a nation.

Statement-wise Analysis:

Statement 1 is Correct: GDP is the standard measure used to quantify the aggregate economic activity of a nation. It reflects the overall size of the economy; for instance, India is often described as a $3 trillion economy based on its nominal GDP.
Statement 2 is Incorrect: GDP is calculated by summing the value of final goods and services only. Intermediate goods (goods used to produce other goods) are excluded to avoid the error of double counting, as the value of intermediate inputs is already included in the final price of the product.
Statement 3 is Correct: GDP is a territorial concept. It measures production taking place strictly within the geographic boundaries of the country. Economic activities performed by Indian nationals abroad are excluded from India's GDP (though they are included in the Gross National Product, or GNP).

Key Takeaway:
GDP focuses on where production takes place (domestic territory) and counts only final goods, whereas GNP focuses on who produces it (nationals) and includes net factor income from abroad.

Your note

More from Chapter 2: Sectors of the Indian Economy

Consider the following statements regarding the "Service Sector" growth: 1. New services based on information and communication technology have become important. 2. The entire service sector is growing rapidly, providing high incomes to all workers. 3. All workers in the service sector earn high incomes and enjoy job security. Which of the statements given above is/are correct?

medium

Consider the following statements regarding "Disguised Unemployment": 1. It happens when people are visibly unemployed. 2. It is common in the agricultural sector. 3. Removing a few workers from the sector does not affect total production. Which of the statements given above is/are correct?

medium

Consider the following statements regarding the "Unorganised Sector" workers in urban areas: 1. Workers in small-scale industry are always covered under the organised sector. 2. They include casual workers in construction, trade, and transport. 3. Street vendors are considered part of the formal service sector. Which of the statements given above is/are correct?

easy

Consider the following statements regarding the "Primary Sector": 1. It forms the base for all other products. 2. It is unrelated to agriculture and allied activities. 3. It includes activities like mining and forestry. Which of the statements given above is/are correct?

easy

With reference to the "Tertiary Sector", consider the following statements: 1. It involves the direct extraction of natural resources. 2. Transport, storage, and banking are examples. 3. It generates services rather than goods. Which of the statements given above is/are correct?

easy

Keep practising Chapter 2: Sectors of the Indian Economy

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The correct option is 1 and 3 only.

Explanation

Statement-wise Analysis:

Statement 1 is Correct: GDP is the standard measure used to quantify the aggregate economic activity of a nation. It reflects the overall size of the economy; for instance, India is often described as a $3 trillion economy based on its nominal GDP.
Statement 2 is Incorrect: GDP is calculated by summing the value of final goods and services only. Intermediate goods (goods used to produce other goods) are excluded to avoid the error of double counting, as the value of intermediate inputs is already included in the final price of the product.
Statement 3 is Correct: GDP is a territorial concept. It measures production taking place strictly within the geographic boundaries of the country. Economic activities performed by Indian nationals abroad are excluded from India's GDP (though they are included in the Gross National Product, or GNP).