Consider the following statements regarding the "Gross Domestic Product (GDP)": 1. It is the value of all final goods and services produced within a country. 2. It is calculated as an average over a decade. 3. It excludes the value of intermediate goods to avoid double counting. Which of the statements given above is/are correct?

Correct Option The correct option is 1 and 3 only. Explanation Gross Domestic Product (GDP) is a fundamental measure of the size and health of an economy. It represents the total monetary value of all final goods and services produced within the geographical boundaries of a country during a specific period. Statement-wise Analysis - Statement 1 is Correct: GDP is defined as the market value of all final goods and services produced within the domestic territory of a country. It focuses on production within the borders, regardless of whether the factors of production are owned by residents or non-residents. - Statement 2 is Incorrect: GDP is a flow concept measured over a specific period of time, typically a financial year or a quarter. It is not calculated as an average over a decade. Averaging over a decade would obscure short-term economic fluctuations and annual growth trends. - Statement 3 is Correct: In the estimation of GDP, only the value of final goods is included. The value of intermediate goods (goods used in the production of other goods) is excluded to prevent the problem of double counting. If the value of intermediate goods were added, the value of the same commodity would be counted multiple times at different stages of production. Key Takeaway Gross Domestic Product (GDP) measures the value of final economic output produced within a country's domestic territory during a specific timeframe (usually a year or quarter), strictly excluding intermediate goods to ensure accurate valuation.

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

mcqeasy

Consider the following statements regarding the "Gross Domestic Product (GDP)":

It is the value of all final goods and services produced within a country.
It is calculated as an average over a decade.
It excludes the value of intermediate goods to avoid double counting.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

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

Did you get this right?

Solution

Correct Option

The correct option is 1 and 3 only.

Explanation

Gross Domestic Product (GDP) is a fundamental measure of the size and health of an economy. It represents the total monetary value of all final goods and services produced within the geographical boundaries of a country during a specific period.

Statement-wise Analysis

Statement 1 is Correct: GDP is defined as the market value of all final goods and services produced within the domestic territory of a country. It focuses on production within the borders, regardless of whether the factors of production are owned by residents or non-residents.
Statement 2 is Incorrect: GDP is a flow concept measured over a specific period of time, typically a financial year or a quarter. It is not calculated as an average over a decade. Averaging over a decade would obscure short-term economic fluctuations and annual growth trends.
Statement 3 is Correct: In the estimation of GDP, only the value of final goods is included. The value of intermediate goods (goods used in the production of other goods) is excluded to prevent the problem of double counting. If the value of intermediate goods were added, the value of the same commodity would be counted multiple times at different stages of production.

Key Takeaway

Gross Domestic Product (GDP) measures the value of final economic output produced within a country's domestic territory during a specific timeframe (usually a year or quarter), strictly excluding intermediate goods to ensure accurate valuation.

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 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?

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

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Correct Option

The correct option is 1 and 3 only.

Explanation

Statement-wise Analysis

Statement 1 is Correct: GDP is defined as the market value of all final goods and services produced within the domestic territory of a country. It focuses on production within the borders, regardless of whether the factors of production are owned by residents or non-residents.
Statement 2 is Incorrect: GDP is a flow concept measured over a specific period of time, typically a financial year or a quarter. It is not calculated as an average over a decade. Averaging over a decade would obscure short-term economic fluctuations and annual growth trends.
Statement 3 is Correct: In the estimation of GDP, only the value of final goods is included. The value of intermediate goods (goods used in the production of other goods) is excluded to prevent the problem of double counting. If the value of intermediate goods were added, the value of the same commodity would be counted multiple times at different stages of production.