Question

In an economuy, the following transactions take place :
`**` A sells goods of Rs. 20 crores to B, Rs. 30 crores to C, Rs. 40 crores to households and goods worth Rs. 10 crores remain unsold. Value of inputs of firm A is assumed to be zero.
`**` B sells his output worth Rs. 40 crores to C, Rs. 60 crores to D and Rs. 50 crores to final consumption.
`**` C sells his output worth Rs. 100 crores to D, Rs. 100 crores to households and exports worth Rs. 100 crores.
`**` D sells Rs. 300 crores to households and Rs. 100 crores to government.
Calculate : (i) Value Added by each firm, (ii) Total Value Added , (iii) Total Consumption Expenditure.

Answer 1

Correct Answer - Rs. 590 crores

(i) Value Added by each firm
Value added by firm `A= GVA_(MP)` of A = Rs. 100 crores
Value added by firm `B=GVA_(MP)` of B = Rs. 130 crores
Value added by firm `C=GVA_(MP)` of C = Rs. 230 crores
Value added by firm `D= GVA_(MP)` of D = Rs. 240 crores
(ii) Total Value Added
`GDP_(MP)= sum GVA_(MP)=100+130+230+240= Rs. 700` crores
(iii) Total Consumption Expenditure
= Sales to households by A + Sales to households by B + Sales to households by C + Sales to households by D + Sales to government by D
`=40+50+100+100+300`
Rs. 590 crores