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in National Income Accounting by (26.1k points)
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Define value added method. A farmer produces 5 quintals of wheat, out of which he sells 3 quintals to a flour mill and 1.5 quintals to consumers at the rate of ₹1000 per quintal. He retains the balance of 0.5 quintals of self-consumption. For wheat cultivation he spends ? 2000 on account of purchasing seeds and fertilizers. Calculate value added by the farmer

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by (26.7k points)
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The real value added in the production process is called Gross value added.

Gross value added = Value of output – Intermediate consumption

Gross value added = 5000 – 2000 = 3000

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