Question 14 - Teachoo Sample Paper - Social Science Class 10 - Paper 1 - Solutions to CBSE Sample Paper - Social Science Class 10 - Social Science Class 10

In the process of calculating the Gross Domestic Product (GDP), which of the following goods would NOT be included in the final count?

1. A smartphone sold directly to a consumer by an electronics store

2. Cotton sold by a farmer to a textile company

3.  Iron ore sold to a steel mill for making steel

4. A book purchased by a customer at a bookstore

OPTIONS:

1. Only A and B

2. Only B and C

3. Only A and D

4. All A, B, C, and D

Answer:

Answer by Student 

So, the correct answer is option (B): Only B and C

Detailed answer by Teachoo

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• In the process of calculating the Gross Domestic Product (GDP), only the value of final goods and services are included in the final count. Intermediate goods, which are used as inputs for the production of final goods, are not included in GDP calculation to avoid double-counting.

Let's check all the options 

• (A) A smartphone sold directly to a consumer by an electronics store - T his would be included in the final count of GDP as it is a final good that has reached the end consumer and is not used in further production.
  So, this option is incorrect.

• (B) Cotton sold by a farmer to a textile company - Cotton sold by a farmer to a textile company is an example of an intermediate good because cotton is used as an input to produce final goods such as clothing and textiles. Therefore, the value of the cotton sold by the farmer to the textile company would not be included in the GDP calculation.
  So, this option is correct.

• (C) Iron ore sold to a steel mill for making steel - Iron ore sold to a steel mill for making steel is also an example of an intermediate good because iron ore is used as an input to produce steel, which is a final good. Therefore, the value of the iron ore sold to the steel mill would not be included in the GDP calculation.
  So, this option is correct.

• (D)A book purchased by a customer at a bookstore - A book purchased by a customer at a bookstore is an example of final goods that are sold directly to the end-user and are not used in further production. The value of the book would be included in the GDP calculation.
  So, this option is incorrect.

Thus, the correct answer is option (B): Only B and C

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