Question : In an economy, the value added at different stages of production is as follows (in INR):
Stage 1: INR 800,000
Stage 2: INR 600,000
Stage 3: INR 400,000
If the total value of intermediate consumption is INR 300,000, what is the value of final goods produced in the economy?
Option 1: INR 1,300,000
Option 2: INR 1,400,000
Option 3: INR 1,500,000
Option 4: INR 1,600,000
Correct Answer: INR 1,500,000
Solution : The correct answer is (c) INR 1,500,000
Stage 1: INR 800,000
Stage 2: INR 600,000
Stage 3: INR 400,000
Total value of intermediate consumption: INR 300,000
To find the value of final goods, we subtract the total value of intermediate consumption from the sum of the value added at each stage:
Value of final goods = (Stage 1 + Stage 2 + Stage 3) - Total value of intermediate consumption
Value of final goods = (INR 800,000 + INR 600,000 + INR 400,000) - INR 300,000
Value of final goods = INR 1,800,000 - INR 300,000
Value of final goods = INR 1,500,000
Therefore, the value of final goods produced in the economy is INR 1,500,000.
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