Let firm A produce goods worth ₹500 and its intermediate cost (IC) be ₹200 and these goods are sold to firm B
Then let Firm B sell these goods to Firm C for ₹500 and Firm C sells these goods for ₹1000 to the final consumer
So as per value added method National income should be (500-200) + (700-500) + (1000-700) = 800
But as per Expenditure Method it should be ₹1000 as the final consumption expenditure is worth ₹1000
So why is difference in finding the answer using different methods????

Dear student, 

In your calculation, the value of 700 that you have taken is not clear. Please recheck your question so that we can help you in a better manner. 

  • 1
What are you looking for?