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

mcqeasy

The value of which of the following is used to calculate the Gross Domestic Product (GDP)?

Official previous-year question

Verified 1 Aug 2026.

Options

AOnly final goods and services produced.
BOnly goods produced in the organised sector.
CAll goods and services produced.
DOnly intermediate goods and services produced.

Did you get this right?

Solution

The correct option is Only final goods and services produced..

Explanation

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

Detailed Analysis:

All goods and services produced. is Incorrect: Calculating GDP based on "all goods and services" (both intermediate and final) would lead to the error of double counting. For example, if the value of cotton is counted when produced, and then again when it is processed into a shirt, the value of the cotton is counted twice.
Only final goods and services produced. is Correct: GDP calculations strictly include only final goods and services. These are goods that have crossed the boundary of production and are ready for use by final consumers or for investment. This method ensures that the value of a good is counted only once.
Only intermediate goods and services produced. is Incorrect: Intermediate goods-those used as inputs in the production of other goods (e.g., steel used in car manufacturing)-are excluded from GDP to prevent inflating the national income figures through double counting.
Only goods produced in the organised sector. is Incorrect: GDP includes production from both the organised and unorganised sectors. While measuring the unorganised sector is challenging, its economic output is a component of the total domestic product.

Key Takeaway:

The distinction between intermediate and final goods is crucial in National Income Accounting; only the value of final goods is included in GDP to avoid the fallacy of double counting.

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

Keep practising Chapter 2: Sectors of the Indian Economy

Work through every question from this NCERT chapter.

Browse all NCERT Class 10 Economics chapters

The correct option is Only final goods and services produced..

Explanation

Detailed Analysis:

All goods and services produced. is Incorrect: Calculating GDP based on "all goods and services" (both intermediate and final) would lead to the error of double counting. For example, if the value of cotton is counted when produced, and then again when it is processed into a shirt, the value of the cotton is counted twice.
Only final goods and services produced. is Correct: GDP calculations strictly include only final goods and services. These are goods that have crossed the boundary of production and are ready for use by final consumers or for investment. This method ensures that the value of a good is counted only once.
Only intermediate goods and services produced. is Incorrect: Intermediate goods-those used as inputs in the production of other goods (e.g., steel used in car manufacturing)-are excluded from GDP to prevent inflating the national income figures through double counting.
Only goods produced in the organised sector. is Incorrect: GDP includes production from both the organised and unorganised sectors. While measuring the unorganised sector is challenging, its economic output is a component of the total domestic product.

Key Takeaway:

The distinction between intermediate and final goods is crucial in National Income Accounting; only the value of final goods is included in GDP to avoid the fallacy of double counting.